THE POTENTIAL DOMINO EFFECT OF GAMESTOP
Lawyer Monthly, 07 April 2021
The GameStop saga stopped the stock market in its tracks earlier this year, with wealthy hedge funds losing millions of pounds. The move was orchestrated on a subreddit thread, with vast numbers of average investors joining forces to push up the share price.
No one can deny the effect was tumultuous. However, what isn’t so clear is what will happen in the longer term. The legalities of the subreddit crowd are still in question, yet there’s no guarantee that it won’t happen again.
While creating a hike in price as significant as GameStop seems unlikely, there is an appetite for a repeat. There are many retail buyers who are keen to snap up shares that hedge funds are shorting in a bid to create another stock market tsunami. So could there be a domino effect following on from GameStop?
