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GameStop phenomenon is a collision of the financial system, says creator of WallStreetBets

From his home in New Mexico, where he leads a quiet life with his wife and twin children, Jaime Rogozinski sees the collision of two trains that could mark a before and after in the stock market of the United States. This is the description that the founder of the Reddit sub-forum, WallStreetBets, has given to the current conflict that exists between the large Wall Street companies and a group of minority investors on Reddit.

Rogozinski founded WallStreetBets nine years ago as a community where young people can come together and share information on how to invest in the stock market. According to a recent interview with CNN, the creator pointed out that although he predicted the trajectory of the group he had formed, never thought that this forum would reach the repercussions it has today.

And it is that the members of WallStreetBets are after one of the most unexpected events that has happened in the New York Stock Exchange, when they produced a rally for the shares of the video game store chain, GameStop, and have caused large companies such as Melvin Capital to lose millions of dollars.

« In no way did I predict the timing or the magnitude of WallStreetBets, “added Jaime Rogozinski when referring to the fact that the case has already reached the White House and is being discussed.

For him, all this phenomenon stock market is unprecedented. However, he believes that it is the “collision of a system that is not behaving in the way in which it commonly behaves.” Rogozinski notes that the introduction of new forces to the stock market, such as social media and minority investors, are changing the rules of the game and “this was something that it had simply never been tested. For journalists like Julia Chatterley, who was in charge of interviewing Rogozinski, this is a sample “of the democratization of the stock market” and of the power of the people.

The narrative that unites WallStreetBets seems to be consistent with this idea of ​​”democratization of the stock market” and decentralization of financial power. When companies like Robinhood, which provided services for the sale of positions in the retail exchange, decided to restrict the trading of GameStop shares, the Reddit forum burned and they labeled it market manipulation.

The GameStop event, along with other “meme actions” as reeditors call them, could be a before and after in the stock market. Source: AhmadArdity / pixabay.com

By means of a letter, some of these investors stated that there is an “outstanding debt” with citizens from the risk investment funds since the great financial crisis of the 2008. A turning point that also catapulted the essence of Bitcoin, as well as the new decentralized financial market that has been forming in recent years around cryptocurrencies. Although Rogozinski did not elaborate on this issue, or on the repercussions that he believes this movement may have, he did affirm that this chain of events “will affect everyone.”

No one is prepared for the regulations to come

With the appearance of the White House in the midst of this conflict and the statements on the GameStop case made by Janet Yellen, Secretary of the Treasury of the United States; it is a matter of time before the whole situation of the redditors and Wall Street reaches the hands of the regulators.

Jaime Rogozinski believes that “nobody is prepared to handle the regulatory side.” In this sense, points out that neither the regulators, nor the big companies of the stock market, much less the forum itself can foresee what will come out of all this conflict. Because of this, the founder of WallStreetBets states that he “does not envy them” because it will be a complex altercation.

It has been a year since Rogozinski was removed as part of the Reddit forum, since the The platform fired him on the grounds that he had benefited from the WallStreetBets brand.

The founder had published a book, entitled “ WallStreetBets: How the Boomers Made the Casino World’s Largest for Millennials ”, which was criticized as a“ greedy ”move. However, due to this inconvenience, Rogozinski does not feel in the eye of the storm.

“I’m enjoying this from the sidelines,” he clarified in the interview while laughing. While he acknowledges that some people could lose money in the midst of all this stock market movement, he also claims that the stock market is like this. Meanwhile social networks mock (with memes) that it is the multimillion dollar firms, like Melvin Capital, and not the American middle class that is losing a lot of money this time. In this sense, the move has gained many followers.

WallStreetBets is now a forum that has more than 4, 5 million followers, and counting, the vast majority being amateur investors who are coordinating to raise the prices of certain companies. The investment model is clear: bet on firms that are on the verge of bankruptcy and that big on Wall Street bet on the decline in their shares. In other words, the confrontation is with the short sellers, who profit from the depreciation of these companies.

GameStop has not been the only favored company in this move, since they have also increased the shares of AMC, BlackBerry and even Blockbuster. While the big guys lose money, this organized group of redditors is making huge profits from the rally of up to 800% that GameStop shares have had. Likewise, cryptocurrencies such as DogeCoin have also benefited. An event that shows that the balance has tilted, for the moment, in favor of minority investors.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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