In less than a year, the stock for video game retailer GameStop jumped from less than $3 a share to almost $350.
Here’s what happened.
All last year, GameStop was struggling — its stock selling at less than $20 a share.
Big Wall Street investors saw an opportunity. They started “shorting” the stock, betting the price would drop.
If it did, they would make money. But if it rose, they’d take a loss.
That action angered small investors who used the social media platform Reddit to encourage others to buy, driving up the stock price dramatically and creating huge losses for those big-time Wall Street investors.
But on Thursday morning, the stock trading app Robinhood halted trading on GameStop stock.
Rep. Kelly Armstrong, who joined us for our Jan. 28 KX Conversation, takes issue with Robinhood’s decision to cut off customers from trading. We discussed why, how what’s happening in the stock market is unusual and if he thinks this incident should lead to new regulation of Wall Street.
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