There is no doubt that the events seen in Wall Street over the last week have taken the world by surprise. Young stockbrokers have successfully manipulated the prices of two stocks recently, purposely costing older and more experienced traders millions of dollars.
Another volatile trading week has begun as the Reddit army upends Wall Street. https://t.co/VTssa4d3hc— ABC News (@ABC) February 2, 2021
If you haven't heard yet, an unknown number of Reddit users have been working all together through a subreddit called r/wallstreetbets with the purpose of making money by taking advantage of the short-selling option, which allows traders to sell stocks they don't own yet, helping an organized group of people control its price and consequently make a profit.
The subreddit with more than 5 million users has successfully enabled a number of traders to invest in the stocks of the severely undervalued GameStop and AMC Entertainment.
This whole trend started due to the devaluation of stocks following the coronavirus outbreak. Last Spring, stock markets around the world lived through gruesome drops that made it easier for regular people, who have been spending more time at their homes, to invest their savings in the market.
Through the organized effort and thanks to the short-selling option, the GameStop stock skyrocketed unexpectedly, costing non-Reddit investors who had bit the stock was going down as the company faced major financial troubles millions of dollars.
Making global headlines, the Reddit Wallstreet incident has inspired numerous conversations over non-traditional stock tradings in a free market, especially as fears of similar organizations and groupings that can rock Wall Street order continue to amount.
But, what chances are there of a similar effort to manipulate other stock markets, especially here in the Middle East?
Many Arab brokers seem to be excited about a similar hedging experience, as a Saudi Reddit user posted a thread in support of the r/wallstreetbets investors telling them that he and his friends across the GCC are also buying the GameStop stock. However, Arab investors have very little room, at least so far, to carry out a similar scheme.
This is mainly because the short-selling option is only available in two stock markets in the region; the Abu Dhabi Securities Exchange and the Saudi Stock Exchange also known as Tadawul. Nevertheless, the possibility of Arab Redditors organizing themselves to play a similar game in one of the regional markets remains slim, particularly as more consequences of the Wall Street war continue to unfold over time.
If Riddtors continue to win the Wall Street battle with no repercussions, chances are millions of people from around the world will have higher hopes of gaining profit in stock markets, which can eventually boost the currently troubled stock exchanges.
Do you think the world is going to witness new business trends in the next few months? What do you think of the Wall Street Redditors?
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