Stonks are bonkers, and other lessons from the Reddit rebellion | Curio
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Bloomberg Businessweek

Stonks are bonkers, and other lessons from the Reddit rebellion

22 mins | Feb 10, 2021
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Are casual investors, and not Wall Street, the real victims in the Reddit-GameStop saga? Pat Regnier, Bloomberg Businessweek's finance editor, wants us to listen carefully: "a lot of small investors who jump onto GameStop and the other meme stocks are going to get badly hurt." In this piece, he analyses all the elements that allowed the trading craze to happen: media, free trading apps and the pandemic, and explains why "serious money is still going long." "GameStop may have left short-selling hedge funds wheezing. (No sympathy: This is the business they chose.) But in general the popularization of markets works beautifully for the financial industry. The serious money in finance comes from the opposite of shorting — the 'long' bets that prices will keep going up. Investors’ willingness to go long is what really fuels the profits that investment banks earn helping companies sell their stocks. It’s the long bet that sells mutual funds and ETFs and cryptocurrency trading apps. And it’s the thrill of the long bet that helps separate everyday investors from their money and rake it into the pockets of Wall Street’s horde of intermediaries."
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