WATERTOWN, N.Y. (WWNY) - It’s a David versus Goliath battle - everyday investors versus billion dollar hedge funds. It’s causing historic losses on Wall Street.
For those looking to invest, video game retailer GameStop probably wasn’t at the top of the list.
It’s value was dropping fast during the pandemic with more people buying games online.
However, that changed this week thanks to people like Matthew Jobson.
“I have just under 2 shares. I’m up right now and that could change in the next hour, I’m up right now about $300,” said Matthew Jobson, investor.
Jobson is one of millions of everyday people who have bought shares in GameStop, causing it to skyrocket as high as $381 a share on Friday.
Investors on Wall Street were betting on GameStop’s stock to do worse, taking what’s called a “short position”.
Their plan backfired when people on the internet came together. A lot of them from a Reddit group called ‘wallstreetbets’ started buying all of the shares, inflating the price and costing rich investors billions of dollars
“These are stocks that have kind of caught fire. They generally are high volatility stocks, meaning that there is a high price movement,” said Allan Zebedee-Associate, professor of finance at Clarkson University.
“It’s not at all surprising to me that this kind of thing eventually happened as we gave retail individual investors more access to markets,” said Ryan Hickey, assistant professor of economics at St. Lawrence University.
That access coming from apps like Robinhood, which at one point this week blocked investors from buying shares in GameStop.
Many have seen the upward trajectory and are looking to buy. A local financial planner says taking a chance on GameStop at its high price is risky.
“No one rings the bell at the top, no one rings the bell at the bottom. That’s why every person should use their judgement and if it is not your thing let the professionals do it,” said Cyril Mouaikel, managing director, RBC Wealth Management.