Aust Trading Apps, Super Funds Hit In GameStop Fustercluck
SYDNEY/NEW YORK/SAN FRANCISCO: The GameStop Fustercluck is essentially a finance story, but it is the technology fuelling what has been called a revolt against Wall Street that makes it interesting for CDN.
The outcome for EB Games here, whose parent company is GameStop, is also crucial for the company’s future in Australia and the hundreds of staff it employees.
It’s also about how young people are using sites like Reddit and the Internet to overturn established institutions like the NYSE and bring down hedge funds, once worth billions, that are now shutting up shop owing as much as they were once worth.
Reggae legend Bob Marley wrote a song called Small Axe. “We are the small axe, Ready to cut you down” goes the song, and that’s what has happened here.
Thousands of small axes on Reddit and across the globe are using small investments via the Internet to push up the price of GameStop, to stop hedge funds profiting from its downturn on the stock market. Iconic IT company Blackberry is another stock being buoyed by these same investors.
In Australia it’s led to share trading apps being hit by outages and superannuation funds facing the consequences of a hedge fund downturn.
Aussie share trading platform Stake experienced a tech outage last week that saw users here unable to trade on the US market due to the massive surge by Redditors who consider they are taking a righteous stand against the investment establishment and short-sellers.
There are a number of trading apps available to Australian investors but so far only Stake has publicly reported problems.
GameStop is a publicly listed chain of US videogame stores and parent company of EB Games, which can be found in shopping centres across Australia.
So, what goes for GameStop goes for EB Games and at the moment the US company is the meat in the sandwich between the hedge funds on one side and Redditors on the other.