Welcome to week two of the Husky Investment Tournament!
Have you been paying attention to the financial news? This past month has seen a large amount of coverage given to normal everyday people. The stock market has felt the impact of retail traders banding together over social media to increase share prices.
Retail traders are people like you and me that do not hold large amounts of financial resources. In the past, this group was never given a second thought, but when they came together, Wall Street took notice. Gamestop stock saw its price rally from $15 to $350 at the peak. Many hedge funds who sold the stock short lost a significant amount of money.
It got to the point where well-known trading apps such as Robinhood had to restrict the trading of the selected stocks. This led to even more interest in the story, and even more people investing in the selected stocks. Congress recently decided to get involved and it will be interesting to follow along and see how this all plays out.
It is important to note that for all the retail traders that made money, an even larger amount lost money when the stock fell back down to its true fundamental value. Trevor Salata, a current Michigan Tech student, goes over what happened in this week’s video.