Day traders poured money into the struggling GameStop video game retailer and other beaten-down businesses. Their buying has swollen the share prices of those companies beyond the imagination of anyone. They inflicted huge losses on the super-rich hedge funds, who placed bets that stocks would drop. Of course, their strategy is freighted with risk. The stock prices they have purchased are now multiples above any level justified by revenue, earnings or future prospects.
The danger is that stocks could collapse at any moment, perhaps. But as one Reddit user wrote Friday, “I’d rather lose it all than give them what they need to destroy me … I’ll burn it all down just to spite them” “They figured out how to play the way Wall Street has been playing for a long time,” an expert on cultural trends says of day traders. After a prolonged period of stock gains, the S&P 500 index suffered its worst week of losses since October last week, fueled by fears over market fragility. According to a new database, the richest 1 percent of Americans in 2019 collected about 19 percent of pre-tax income.
The wealthiest 10% in the U.S. Approximately 85% of inventory wealth is owned by Americans, a share that has grown steadily over time. Tech has made mobilizing, swapping information and plotting strategy easier, faster and easier for the aggrieved. “At this point, it’s not about the money. I think this is bigger than the money now,” one trader says of the stock market, which is the Reddit day traders’ target. Since the pandemic erupted in March, the world’s 10 richest men have swelled their collective wealth by $500 billion, Oxfam says. The report finds that nearly 10 million people who have lost jobs due to the virus are still unemployed, and more than 20 million in 2007-2009 have lost jobs.