Have you all ever thought that social media could end up resulting in different things to your business like increasing leads thereby increasing profits, increasing the mass reach of the program, spreading awareness, creating a sense of consumerism? But it could also result in a stock market blow up. Strange right? But yes social media can be a tool for various things. Let us take an example and see how.
How did Reddit Forum end up making the GameStop stock blow up?
Social media can be a game-changer. Read this article to know what actually happened.
Hudge fund Melvin Capital tried to short GameStop stock (a shop that sells physical copies of video games).
Short selling is a trading strategy that speculates on the decline in a stock or other security’s price. It is an advanced strategy that is undertaken by experienced traders and investors.
Reddit users from forum r/wall street decided to buy Game stop as they thought their stock was undervalued. The value went up, and the hedge fund was shorting it began to lose money.
Elon Musk then came to the picture and tweeted about these investors on 26/01/2021, causing even more people to buy it. People began to invest in these shares.
On 28/01/2021 Robin hood, a very famous investing app stopped allowing people to trade the GameStop Stock.
The SEC (Securities and Exchange Commission) which enforces the federal law around the stock market is now looking into this trading boom, as they thought some insider trading might have taken place.