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Tusinski: The GameStop stock incident is good for college students

Graphic illustration of money with the Gamestop logo on it coming out of a machine with the stock market symbol on it
(Graphic illustration by Christine Moore-Bonbright | The Collegian)

Editor’s Note: All opinion section content reflects the views of the individual author only and does not represent a stance taken by The Collegian or its editorial board. This column is not intended as financial advice, nor should it be construed as such.

If you’ve paid much attention to the news in the past couple of weeks, you’ve surely seen what happened in the stock market. Wall Street was in an uncharacteristic panic. Hedge funds saw huge losses. Wall Street stood to lose lots of money.

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Even though the GameStop story is a bit old by now, it still has ramifications, especially for college students.

To provide some background, here’s what happened: a semi-popular Reddit forum, called r/wallstreetbets, used their collective hive mind to plot out a way to make a lot of money. They figured out that a bunch of Wall Street hedge funds were planning to short a number of stocks, which is essentially a Wall Street term meaning that the markets were betting that GameStop would lose money.

r/wallstreetbets planned to interrupt that short. If they were able to come together and raise the stock prices of the companies Wall Street was going to short, they would make huge profits, all while sticking it to Wall Street and making them lose huge sums of money.

So r/wallstreetbets got to work. They found the companies Wall Street was betting against, and they dumped money into them. GameStop, Blackberry, AMC Theaters and a couple of other companies saw their stock prices rise within just a short number of days.

The Reddit board had effectively started a populist uprising.

The memes are right: Apes together strong.”

Using the app Robinhood, which allows everyday people to invest small amounts of money from their phones, Redditors and internet users who caught wind of the meme shot those companies’ stocks to the moon, and some individuals made a lot of money doing so.

This unprecedented takeover of the stock market by average people is great news for everyone but especially college students. The majority of this rise was made by people who invested small amounts of money, ranging from just a few bucks to only a few hundred. And even those who invested relatively small amounts saw returns in thousands of dollars

To put it bluntly, the GameStop fiasco introduced a lot of people to investing who wouldn’t have gotten involved otherwise. Those people also made a lot of money. What this means is that the average person, for the first time ever, had the power that wealthy stock brokers do. And on top of that, this uprising was organized by millennials and Generation Z. Internet literate teens and college kids were able to even temporarily beat Wall Street firms at their own game.

Not only that, but this could set a precedent. It shows that the memes are right: Apes together strong.

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Take the cryptocurrency Dogecoin, for example. It’s a cryptocurrency created as a meme in 2013 based on the popular meme Doge. For most of its existence, Dogecoin has been worth near nothing.

Yet as r/wallstreetbets shot GameStop and other stocks to the moon, they figured they could take Dogecoin with them, even as a joke.

The result, however, was anything but a joke. Within just a few days, the price of a single Dogecoin went from $0.0083 on Jan. 25 to $0.0716 on Jan. 28. — an increase of 762%. While the cryptocurrency being worth seven cents sounds small, keep in mind how huge the increase is. If you’d invested $20 in Dogecoin while it was worth $0.0083, you would have made about $150 within only a couple days.

And again, Dogecoin’s rise was caused by a bunch of internet savvy 20-something-year-olds who invested money as a joke. They were egged on by a swarm of influential celebrities too, from Elon Musk to Snoop Dogg.

With both Dogecoin and GameStop, what the first month of 2021 has shown us is that when working together, average people can make a lot of difference, especially in the stock market. While it’s unclear if such a widespread and coordinated effort like this will shake up the stock market again, the fact that it happened once is incredible. The fact that it still has the potential to happen again is even more incredible.

Dylan Tusinski can be reached at letters@collegian.com or on Twitter @unwashedtiedye. 

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