GameStop’s saga may be over; its effect on Wall Street isn’t
February 17, 2021 10:56 am
[Source: The Associated Press]
The frenzy around GameStop’s stock may have quieted down, but the outsized influence small investors had in the saga is likely to stick around.
No one expects another supernova like GameStop to happen again, where a band of smaller-pocketed investors helped boost a struggling company’s stock 1,000% in two weeks.
But the tools they employed can be used again and again if those smaller investors stay connected on social media forums and if regulators don’t change the rules to hinder them.
These smaller players, called “retail investors” in the industry to differentiate them from hedge funds and other big firms, are using many of the same tactics as the professionals, after all. And if retail investors continue to hold greater sway, the result will likely be sharper swings for some stocks than they would have had otherwise, if not to GameStop’s spectacular degree.
GameStop’s wild ride is causing some professional investors to gird for more volatility in the market and politicians in Washington to ask who is getting hurt.
A House committee is calling several of the GameStop saga’s players to a hearing on Thursday, titled “Game Stopped? Who wins and losses when short-sellers, social media and retail investors collide.”