MSD students react to the stock market frenzy

Throughout the week of Jan. 25, 2021, a prominent shift occurred in the stock market. The stock price of Gamestop (GMC) skyrocketed and Melvin Capital lost $19 billion to retail investors.While Gamestop was short selling, professional investors began to borrow certain shares of a stock to sell and buy back later with the notion to return them and gain more money if the stock drops. Professional investors were making bets that the company wouldn’t go up. The Gamestop business was having a hard time selling, like many other businesses during a pandemic. Few people had hopes of the business gaining capital again.As a result, companies such as Melvin Capital had shorted the stock. Seeing this, retail investors decided to come together on Reddit and buy the stock, driving the price higher than it ever has been.This was the main reason for the rise of Gamestop’s price. An underlying reason behind it was because Chewy’s former CEO had bought 9 million shares of Gamestop, which triggered a minor rise. He came out and said that he planned to reinvent Gamestop’s business model and transfer them online.This is what initially brought a group of retail investors together to buy the stock. The number of people only increased when they realized major companies like Melvin Capital had shorted the stock. “Shares in GameStop ticked up on Jan. 11 after it named three people to its board of directors as part of a deal with shareholders who had been agitating for change. That caused some short sellers to abandon their positions, helping to drive the stock up more in the following days,” David Ingram and Lucy Bayly from NBC said in their article.When the stock rapidly grew, everyone was surprised. People who had bought the stock were suddenly gaining a large amount of money. “I think everybody was surprised honestly, I wish I had bought that stock before it blew up, I’d be rich. It was just a very big thing for the stock market,” Marjory Stoneman Douglas High School junior Zachary Page said. Many people have different views on what happened, some believe it’s a good thing, some people aren’t very involved with that kind of stuff. “I realize that a lot of people lost a lot of money from this event because they invested in Gamestop when they were at $200 or maybe even $400,” senior Maxwell Weston said. “I think it got a lot of people interested in the stock market and how it works. I believe that this will lead to a lot more people having freedom financially in the future, which is ultimately what I want for everyone.”Weston, the president of the MSD Investment Club, also shared some advice on the stock market for students.“Advice I would give [students] would be to constantly read and follow the stock market [since it] is how people get in on a stock and make a decent amount of money from the stock,” Weston said.Everyone was quite shocked about this stock market frenzy. This event took over the news and made a huge impact on the stock market in the present and in the future.