In January 2021,  a very strange event happened in the financial world, such a strange thing, which can be said for the first time in the 200 year history of Wall Street. To many that is a revolution. Tughlaq scandal erupted over the share price of a company called GameStop. Behind such an event was a sub Reddit of the popular platform Reddit called r / wallstreetbets. Discord, Facebook and Google Play Store were also discussed later due to this incident.While not a groundbreaking contribution to the genre of information technology, PC Builder offers a variety of articles to help readers understand the evolution of the big tech giants and the Internet.

To understand the whole thing, we need to get acquainted with a few things first. We will try to present the issues very briefly and easily.

Short Selling: In the stock market, not only buying and selling shares but also borrowing shares or stocks can be done. The borrowing system here is that you have to borrow some shares from a company for a certain period of time and repay it with interest within that period. For example: You borrowed a stock from a company with 20 taka + interest for 3 months. What is the benefit of borrowing?

Usually in the case of short selling, the stock is sold at the same price as soon as it is borrowed. And you have to wait for the price of that stock to go down. Whenever the price goes down, you think the selling stock price goes up to Tk 10 with Tk 20. That's when 8 shares are paid with 10 rupees.This means that if you buy a stock for 20 rupees and sell it immediately, after a while you buy that stock for 10 rupees and return it to the company, then you can earn 10 rupees in the middle. In this way, even if the stock price of 20 rupees goes down to 1 rupees, you can still earn a maximum of 19 rupees. But even if a stock has a minimum price, there is no limit to what the maximum price can be. In other words, if any share sold for 20 rupees can become 200 rupees or 2000 rupees for any reason.


In that case, the loss will be much higher because you will have to buy and pay back the shares. In other words, although there is a limit on how much profit can be made, there is no limit on how much the loss will be. Thus, if the price goes up for any reason, the borrower has to buy it as soon as the price goes up, but in doing so, the stock price goes up further. This condition is called "short squeeze".

Hedge fund: Many investors invest in the stock market by forming a fund together. They are private because of which they can do as much as they want. They do a lot of aggressive short selling. Being a big big investor, their nails are in the mirror of Wall Street. Basically they control Wall Street. They can take risks like short selling because they can understand by doing various calculations that the stock price of a company may go down in the future and they start selling short accordingly.

r / Wallstreetbets: This is a Sub Reddit where retail investors in the stock market talk like themselves, talk about various issues in the stock market and share memes. They can't see big investors again. Especially Hedgefund wallers. Because of them, these retail investors often face losses due to short selling.

GameStop: This is a physical gaming store in the US that sells CDs of games and ginger accessories. They have many outlets across America.

r / A radiator from Wallstreetbets whose real name is Keith Gill just talked about GameStop's stock several months ago. There are videos on YouTube about why it should be invested here and why it is undervalued, about the stock price of GameStop, etc. Also r / Wallstreetbets more radiators let them find more findings in this sub-red.

They even find the Hedgefund that is investing millions of dollars and selling short on GameStop's stock. As it turns out, 64% of GameStop's stock has been short-positioned, which is unusual. The funny thing is they were selling more extra short positions.

So in that sub-red, they ask everyone to buy GameStop's stock so that the hedgefund holders who have increased the stock price can play twelve. Quite a few people responded to it. In this way, the share price of GameStop continues to rise overnight. Retail investors make a lot of profit due to short squeeze. Like other markets, one of the characteristics of the stock market is that as the demand increases, so does the share price.

Where one of their stocks was priced at around সেই 10, that price went up to 350. On the other hand, the number of users on r / Wallstreetbets also increased to 3 million in a few days. Meanwhile, in April 2020, where GameStop was a ২০০ 200 million company, they stood at ৮ 26 billion. In January 2021, it became one of the most traded companies in the US stock market.

Which is why the companies that were behind that hedgefund, especially Melvin Capital, lost billions of dollars. Interestingly, a few more companies such as AMC, NOKIA, etc., are noticing heavy short selling, and Redditers started buying stocks of those companies and raising prices. But after a while the stock price of Gamestop started to wear.

This is because in this case, more e-trading apps, including Robinhood, block the way to buy shares by keeping the share selling option on. Due to which the stock price started to decline artificially. In this regard, the CEO of Robinhood said that due to a shady deal with Hedgefund, the stock did not lose its way, but they had to do so because they did not have enough cash to meet the regulatory requirements. This angered users and led to negative reviews on the Google Play Store. Google has to delete about 100,000 1 star reviews because of the organized negative reviews.

r / Wallstreetbets users who used to chat on Discord's server also shut down Discord, alleging "Hate Speech". In this way, Facebook and Robinhood are banned by trading groups. As a result, the overall share price began to fall, which is currently around 50

Many see this as a protest of the little ones against the “bigfish”. Then he started talking against those hedgefunds from all around. Demands to bring them into more rule policy. Elon Mask also tweeted "GameStonk". The matter did not escape the eyes of the American Congressmen. There is a hearing in Congress on this next week.

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