Sen. Elizabeth Warren (D-Mass.) put Wall Street on discover Wednesday amid the continued David and Goliath battle over GameStop inventory organized by a bunch of Reddit customers.
“With stocks soaring while millions are out of work and struggling to pay bills, it’s not news that the stock market doesn’t reflect our actual economy,” Warren stated in an announcement.
It’s true: Despite the coronavirus pandemic that triggered skyrocketing unemployment, the inventory market has soared to document heights during the last yr, underscoring that it does not offer a complete picture of financial well being.
Warren continued: “For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price.”
She concluded that it’s “long past time” for the Security and Exchange Commission and different regulators “to wake up and do their jobs.”
″[A]nd with a brand new administration and Democrats operating Congress, I intend to verify they do,” she stated.
In the previous month, individuals who frequent a Reddit message board referred to as WallStreetBets found that hedge funds had been “shorting” GameStop, or betting that the corporate would lose cash, which in flip would generate profits for the funds. The hypothesis was grounded in some logic, provided that the pandemic has discouraged individuals from going to brick-and-mortar shops to buy video games and gaming gear. But the corporate in mid-January employed a brand new CEO with much-needed digital expertise in an try to buoy itself.
That’s when a bunch of beginner merchants on the Reddit board determined to make a stand in opposition to the Wall Street elites, driving up the value of GameStop inventory. It’s now up greater than 1,000% because the begin of January.
What’s ensued is chaos: At least one hedge fund shorting GameStop inventory has required an enormous bailout on account of the surge in its worth.
The complete mess is basically a conflict between righteous amateurs and the institution.
On Tuesday, billionaire Elon Musk selected to amp up the insanity when he tweeted one phrase ― “Gamestonk!!” ― alongside a hyperlink to WallStreetBets. That additional drove up the value of the inventory.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) echoed Warren in her personal tweet Wednesday afternoon.
“Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino,” she wrote.
“Anyways, tax the rich,” she added.
Calling all HuffPost superfans!
Sign up for membership to grow to be a founding member and assist form HuffPost’s subsequent chapter