Gamestop collapses, but the Reddit battle continues

The revolt of the 'naïve' against hedge funds upsets Wall Street and reaches Congress, even making two sworn enemies agree, the Democratic passionate Alexandria Ocasio-Cortez and Ted Cruz, the Republican senator allied with Donald Trump.

At the center of the war on Reddit between individual investors and hedge funds is Gamestop, a small Texas video game company that does not sail in gold.

Targeted by hedge funds with bets on falling stocks, Gamestop has flown in the last few sessions with daily gains of over 100%.

To support the titles the charge of the small investors who on WallStreetBets, a forum on Reddit, have somehow allied themselves proving to be smarter than the clever ones par excellence of Wall Street, or hedge funds.

However, the decision by Robinhood and other platforms to limit the trading of Gamestop and other titles targeted by Reddit-ers, such as Blackberry and Nokia, is hampering their success strategy.

The restrictions have in fact caused a collapse in Gamestop shares, which have lost up to 56% and suspended due to excess of a decrease.

The limits imposed have infuriated Ocasio-Cortez, known as 'AOC'.

"This is unacceptable. We need to know more about Robinhood's decision to block retail investors from buying stocks while hedge funds are left free" to act, the congresswoman tweeted.

Cruz said he "completely" agreed with her.

Speaker of the House, Nancy Pelosi, said the Gamestop case will be investigated.

On the other hand, the American Treasury and the Sec.

That a small Texas video game company could end up in the middle of a war and in the crosshairs of Congress no one could foresee it.

But the case raises many questions about the future of Wall Street, where small investors want to count more and have more power.

"It's a revolution that started from the bottom" that gives children the opportunity: "there is no turning back, whether it is one platform or another, this is the new normal", commented satisfied Reddit co-founder Alexis Ohanian.

The issues of the Gamestop case - considered by many to be the quintessence of a bubble - are numerous and first of all there is a lack of legislation.

The debate on the change on Wall Street will certainly continue reflecting the largest acquired by small investors who, at home with the pandemic and equipped with trading apps that do not require the payment of commissions, have entered the market firsthand.

Many in the sector invite caution and warn them: initial success does not mean absolute success, the risk - they warn - is that of a rude awakening.