There's A New Twist In The GameStop Saga
On Thursday night, Congresswoman Alexandria Ocasio-Cortez sat down on Twitch with Alexis Goldstein, a finance analyst who wrote an explainer on the recent GameStop drama. The hour and a half stream included several finance experts, including TheStockGuy, who has been offering live coverage of GameStop stocks and regularly discusses the stock market on Twitch.
For anyone that missed this history-making week in stocks, a group of Redditors at r/WallStreetBets organized to perform a short squeeze on traders. The fact that normal people, who organized on the internet, maneuvered to outsmart professional traders has made career investors nervous, Goldstein says. Wall Street operates on the principle of most people not understanding it, and traders tend to get worried once it seems like the market is available to everyone.
Goldstein began the stream by giving a brief overview of the situation, stating that this week gave us a lot to think about, including, "[H]ow do we want to marshal the resources of society, and what do we want to pay attention to? Do we want physicists designing trading algorithms, or do we want them focusing on climate change?" Algorithms for retail trading apps like RobinHood have helped companies detect abnormalities in trading and cut off/limit access to certain stocks.
RobinHood, which specializes in short term trading, decided earlier this week to stop trading on some of the stocks targeted by WallStreetBets. Goldstein explained that it remains unclear who advised RobinHood to stop trade on specific stocks or why the company chose to do so, but the implication seems to be that this move is related to the recent short squeeze on GameStop stocks. RobinHood's attempt to deny retail traders access to specific stocks has provided a new wrinkle in the entire GameStop story.
Representative Ocasio-Cortez explained that the recent trading debacle highlights power issues that have gone largely unexplored in American politics. While hedge fund managers have the power to go to news outlets and deliver a message, she explained, the media rarely hears from retail traders, which make up a large part of the industry. "When you say truth to power, power fights back," Ocasio-Cortez noted, adding that how this event unfolds will hold important implications for the future of the stock market.
Representative Ocasio-Cortez concluded the stream by discussing the generation of people who have had their trust in establishments "rocked," leading them to question institutions that have been stable for years, like the stock market.
In 2020, Representative Ocasio-Cortez shocked the streaming world by breaking records and becoming the top female streamer of the year. Her efforts to use Twitch as a platform for political discourse, with just a bit of Among Us fun mixed in, has changed the way many think about who can stream and what streams include.