What is happening with Stock market?

A bunch of people on reddit started buying Gamestop because they saw that a major hedge fund was shorting the stock. Shorting a stock means you are betting against it. So since a lot of people started buying Gamestop, the price of that stock went way, way up (wayyy more than the company is worth). This screwed over a couple of hedge funds that were shorting the stock and they nearly went bankrupt.

But Gamestop stock has kept going up and up and the stock price got so volatile that Robinhood and other brokerages like WeBull and TD ameritrade stopped letting people buy Gamestop (and a few other stocks) because they literally couldn't afford to do so (this is because of complicated mechanics having to do with the clearinghouses and having enough cash to cover the trades).

But now a lot of people are mad at Robinhood and the brokerages because they think they are just screwing over regular people and only are now allowing them to buy these stocks because they want to help the hedge funds.

The whole thing is dumb because Gamestop is now just a massive bubble and a lot of people are going to lose a ton of money when the price plummets soon... all in the name of sticking it to the rich hedge fund guys.

/r/AskReddit Thread