The rise of Gamestop stock has been a huge talking point in the new year. In part, it’s because of the rags to riches stories it created: people on reddit, a social media platform, using an app aptly named Robinhood to acquire vast amounts of money made off of hedge funds. But partly because of the apps response to the influx of trades and cash. In the past week congress held a hearing to learn about the issue and to decide if foul play was involved with the curbing of some users ability to trade. The hearing focused on the Robinhood app making financial investing, an “addictive experience”. One congressman from went as far as to say that “the real world impact of Robinhood is the democratization of financial addiction.”[1] He is not alone in this sentiment, after trades the app sends virtual confetti to celebrate you buying within the app and recently a 20 year old user committed suicide after suffering what he thought was huge losses while being unable to contact customer support. For many this begs the question of: what comes next for the financial investing apps? Could this lead to more rigorous SEC questioning of Citidel Securities and Melvin Capitol (the company that allows Robinhood to make money off of trades and the hedge fund that suffered the most substantial losses)? Could this be the end of large online communities sharing stock advice and knowledge, as the user responsible for “inciting” the mass purchasing of stock is now facing a class action lawsuit? For me, my biggest question is what comes next for the “little” people who want to make money in investments against large hedge funds and does this mark the end of an era that we never knew we were in?
[1] https://www.nytimes.com/2021/02/18/business/gamestop-robinhood-hearing.html
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