Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://www.socialistparty.org.uk/issue/1119/31974

From The Socialist newspaper, 3 February 2021

GameStop: Billionaires hurt at their own game

photo EPIC/CC

photo EPIC/CC   (Click to enlarge)

Luke, Gloucestershire Socialist Party

Recently, users of big online forum Reddit influenced the entire stock market, causing huge hedge funds to go into meltdown. Wall Street is now calling for regulation. These events could lead to a bigger change to market regulation than the financial crisis.

Redditors realised that hedge funds held huge 'short positions' on stocks and that they could view this information online. A short position is betting that the value of a company falls.

Hedge funds are betting billions of dollars that companies like Blackberry, Gamestop and Nokia will decrease in value, because they're companies with big standings but have become outdated and aren't expecting any growth. However, Redditors have influenced thousands of ordinary people to invest in these companies.

Lots of people buying shares of Gamestop will increase the value of the share, so the people buying them are making massive returns. Meanwhile, hedge funds with short positions are losing billions.

On 26 January, Gamestop opened at $88 a share on 26 January. It peaked at $469 a share on 28 January.

So, while the normal people who are investing are taking risks, they have been able to take huge sums of money away from billionaires and Wall Street.

Obviously, the capitalist class isn't happy that ordinary people are playing their game and manipulating the market to make money, the way that the capitalists normally do.

The difference is that they're now on the losing side, and are now arguing the game is unfair.

Some brokerage apps - which people use to buy shares - ceased trading for these companies. People could no longer invest, and the prices began to fall.

They said that their servers were struggling to cope with the amount of traffic, but it's no coincidence that the capitalist class wanted this. The stock market and capitalist class are being criticised for not allowing a 'free market'.

These events changed people's lives. There are stories online of people thanking Reddit as it allowed them to pay their medical costs or next month's rent.

It has also opened a lot of people's eyes to the system we live in, and how the capitalist class is able to make vast amounts of money with no actual work and producing no value.


Capitalists still in control

The comeuppance of a few greedy hedge funds is hilarious - and welcome! But those left outlets which have suggested that this 'short-squeeze' is in itself a threat to the capitalist system are mistaken, sadly.

Even if every hedge fund in the world were bankrupted at once, which is not on the cards, industry, finance and the economy as a whole remain privately owned. Just look at how the capitalists shut down trading when small investors went too far. Instead, the whole sector should be nationalised under democratic workers' control and management.

Some small investors will make big money at the hedge funds' expense; others may be left carrying the can, and lose their homes, when the bubble bursts. And the latest move - some small investors trying to short-squeeze big banks' control of silver - seems implausible at best.

Meanwhile, big investors will lose some capital but not control of the engines which produce it. Hedge fund managers may lose their jobs, but will waltz into other ones.

For the most part this does not seem to be ideological spite against the hedge funds, but small investors trying to make some money off a bubble. Some working and middle-class people in the US are reportedly throwing their college or retirement funds into it, gambling that they can then cover medical bills and so on. This in itself is an indictment of the system.

James Ivens, East London Socialist Party

Mini-revolution in murky world of finance capital

The Wall Street commentator on Newsnight seemed genuinely lost at what had happened. He couldn't understand how thousands of 'little people' - with a nostalgia for old brands that were about to fall victim to Wall Street - could be rallied against Wall Street to bring a big beast down.

But he only called for reform from above. Yeah right, like Wall Street will ever allow that.

How incredible too that when thousands of normal people do what Wall Street does, the regulator steps in and closes them down. So much for the free market.

This was a mini-revolution in the murky world of finance, and it may be a harbinger of the actual revolution to come.

Nancy Taaffe, Waltham Forest Socialist Party

Donate to the Socialist Party

Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

  • The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
  • When the health crisis subsides, we must be ready for the stormy events ahead and the need to arm workers' movements with a socialist programme - one which puts the health and needs of humanity before the profits of a few.
Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.
We therefore urgently appeal to all our viewers to donate to our Fighting Fund.

Please donate here.

All payments are made through a secure server.

My donation

 

Your message: 

 


In The Socialist 3 February 2021:


Trade Unionist and Socialist Coalition

Launching a political alternative to cuts, poverty and job losses

Why I am attending the TUSC local elections online conference

South Yorks TUSC ready for electoral fight


What we think

Workers' rights and safety: Trade union mobilisation could force more Tory U-turns


News

Socialist Students open letter to Rent Strike network

Children in care: Privatisation is not working

Multimillion-pound rental firm demands thousands from homeless asylum seeker

Covid outbreak at Kent asylum detention centre: Napier is not fit for purpose

New anti-protest law: State forces want more power to crush the protests that are coming


Workplace news

Usdaw conference stripped of democracy by leadership

Usdaw Broad Left rally brings together those campaigning for a fighting union

Strong union lead needed to stop DVLA Covid spread

HMRC: We demand a pay rise without cuts to terms and conditions

Workers fight British Gas 'fire-and-rehire' plans

Vote Steve Hedley for RMT general secretary

The NEU's 'big announcement' - lessons need to be learned

Yorkshire aerospace workers strike against pay disparity

Workplace news in brief


The Communist Manifesto

The Communist Manifesto - A guide to understanding society, and how to change it


Rolls-Royce

1971: Rolls-Royce crisis - when the Tories nationalised in order to secure the interests of British capitalism


Readers' opinion

GameStop: Billionaires hurt at their own game

The Socialist Inbox


International news

Covid 'vaccine wars' underline failure of capitalist nation states to deal with the global pandemic


Campaigns news

New members meeting in the South West - preparing for the battles to come

Why I rejoined the Socialist Party

Help us raise the funds to fuel the working-class fightback

Save our square: we need social housing and public services

Stop Labour council's eviction of Stratford Circus arts centre


 

Home   |   The Socialist 3 February 2021   |   Join the Socialist Party

Subscribe   |   Donate   |   Audio  |   PDF  |   ebook






Related links:

Hedge funds:

triangle'Casino capitalism' - driving another potential financial Armageddon

triangleNHS SOS round-up

triangleHedge fund owners will never blush

triangleFinancial vultures kill Peacocks

Finance:

triangleNational finance meeting

triangleDoing all we can to fund the anti-cuts stand at the ballot box

triangleSocialism 2020: Will you help our finance appeal?

Market:

triangleStop the Channel 4 sell-off!

triangleNHS white paper: no solution to failed Tory policies

triangleTories admit market failure - we want our NHS back!

Capitalist:

triangleCuban protests - what do they represent?

triangleRight-wing study concludes youth like socialism

Stock market:

triangleThem & Us

Reviews and comments

Reviews and comments

28/7/21

Review

TV Review: Stateless blames mismanagement rather than system

14/7/21

Football

England football team

14/7/21

Covid

Readers' comments

7/7/21

Socialist Party

Book: The struggle for world socialism

7/7/21

TV

TV - Statue wars: one summer in Bristol

7/7/21

Black

The story of Joe Clough - Britain's first black bus driver

7/7/21

Socialist Party

Why did I choose the Socialist Party?

30/6/21

Review

TV Review: GB News

30/6/21

US

Readers' comments

23/6/21

Review

Book review: Shuggie Bain

23/6/21

Women

Women and the criminal 'injustice' system

16/6/21

Robert Tressell

Books that inspired me: The Ragged-Trousered Philanthropists

16/6/21

Capitalist

Readers' comments

15/6/21

China

Response to Observer article on China

9/6/21

Review

TV review: Mrs Thatcher vs the miners

triangleMore Reviews and comments articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: [email protected]

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 079 8202 1969

East Mids: 077 3797 8057

London: 075 4018 9052

North East: 078 4114 4890

North West 079 5437 6096

South West: 077 5979 6478

Southern: 078 3368 1910

Wales: 077 7221 5281

West Mids: 024 7655 5620

Yorkshire: 078 0983 9793

ABOUT US

ARCHIVE

Alphabetical listing


July 2021

June 2021

May 2021

April 2021

March 2021

February 2021

January 2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999