The GameStop revolution

AUGETTO GRAIGStock markets are not traditionally the realm of the small investor, but recent events surrounding GameStop shares in America may be ushering in a new era. According to businessinsider.com, GameStop stocks soared as much as 2 000% last month.New terms are surfacing, like ‘meme-stock’ and ‘retail traders’, to join terms once confined to the trading floor, like ‘short sell’, ‘hedge funds’ and ‘day traders’, in conversations on social media platforms between absolute strangers colluding collude for millions and rewards worth even more.Funding the realisation of long-awaited technology, saving a beloved franchise or simply sticking it to the billionaires of the world are among the agendas driving what Reuters describes as social media-driven trading frenzies. Fear of missing out (FOMO) is reportedly also a factor.Stepping up effortsBloomberg reported that GameStop jumped as much as 17% on Monday, 11 January, after activist investor Ryan Cohen stepped up his transformation efforts at the struggling video-game retailer, gaining a seat on the company’s board.Robinhood is the name of the commission-free trading platform used by many of the individuals involved in the remarkable surge in GameStop share-value and the consequent pressure on hedge-funds involved in short selling the resurgent video-game retailer.Short selling is essentially betting on the downfall of a listed company and taking a position to profit from that demise. Large hedge-funds are known for such cynical behaviour, but thanks to coordinated buying and holding of GameStop shares, they have not had their usual joy this time. Melvin Capital Management lost 53% in January, sources told Business Insider, after the Wall Street Journal first reported on it. CNBC reports that Robinhood has since put restrictions on trading in GameStop and other meme-stocks since the start of the week. However, the millennial-favoured stock trading app cut down its list of restricted stocks from as many as 50 on Friday to eight starting Monday, CNBC reported. AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands International and Naked Brand Group are the stocks for which Robinhood restrictions still apply.Silver prices surgeThe retail trade army has set its sights even higher, with Reuters reporting that silver prices have surged to an eight-year high, silver mining stocks leapt, and bullion dealers are scrambling as small-time investors piled in to the metal. "Silver has knock-on effects compared to GameStop because it has links to miners, and then the miners themselves have an impact on how the FTSE 100 performs," Connor Campbell, a financial analyst at SpreadEx, told Reuters. Miners BHP Group, Glencore and Anglo American were the top boosts to the index.Limited opportunitiesBack home, according to small investment enthusiast Robin Tyson, it’s unfortunate that Namibia doesn’t grant small investors the opportunity to participate directly in the stock exchange.“It's a very limited trading environment dominated by large financial funds. Many Namibians of course do indirectly participate, because their money - pension or retirement annuity contributions - is invested by law locally, but unfortunately, there is little opportunity for investors to directly make those investments themselves,” he said.“The only southern African platform that currently caters to small investors is Easy Equities. They allow you to make transactions for as little as N$50 with no monthly costs and at very low brokerage cost, and therefore allow the average person to participate in the market, and to buy and sell shares, both on the Johannesburg Stock Exchange and in the USA.”“New trading platforms like Easy Equities -and the similar Robin Hood platform in the USA - have now opened up the exciting world of investing, allowing nearly everyone to participate in the market,” Tyson said.

The GameStop revolution

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The GameStop revolution

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