It was difficult to avoid the news last week about GameStop, Robinhood and the power of Reddit, how hedge funds faced billions in potential losses having been humbled by an army of small investors buying shares in a failing computer gaming shop that the hedge fund industry had bet against. Much of the discussion took place in the Reddit group r/WallStreetBets which has some 4.8 million users. The action has now moved on to silver.
Will the impact of Reddit stop there? It's unlikely.
Reddit investors’ real power is over Wall Street’s future behaviour https://t.co/oLwRWvHBNT
— Finance News (@ftfinancenews) January 29, 2021
These investors might remind corporates, platforms and perhaps even fund managers where the money that flows so neatly into their pockets actually comes from.
They might also join together to make stands on issues that really matter.
Hedge funds rush to get to grips with retail message boards https://t.co/qdpeduSzOF
— Finance News (@ftfinancenews) January 29, 2021
One Wall Street investor who spoke under the condition of anonymity speculated that these platforms would not retreat back into obscurity, predicting instead that they could become a "breeding ground for targeted disruption of companies", especially those perceived to be behaving badly. The person warned that institutions that do not make good on certain environmental, social and governance standards, for example, could get caught in the crosshairs.
