Did Reddit just do a Harshad Mehta?
GameStop’s stock fiasco has left the entire world in a tizzy. While most are still trying to wrap their heads around what actually unfolded in the past few days, desis are likening the event to 1992's Indian stock market scam that involved the infamous stockbroker Harshad Mehta.
GameStop, a struggling video game retailer’s stock has been making stupefying moves this month, wild enough to raise concerns from professional investors on Wall Street to the hallways of regulators and the White House in Washington.
After sitting around $18 three Fridays ago, GameStop doubled in four days. It kept shooting higher, before nearly doubling on Tuesday and then more than doubling again on Wednesday to $347.51. On Thursday, it gave back a chunk of those gains and was down to $229. But it's still up an amazing 1,250% through the first few weeks of 2021.
Yes, Reddit was involved in all of this. Reddit's subreddit r/WallStreetBets propelled a meteoric surge in American videogame company GameStop's shares soaring over 400% this week, after aggressive touting of GameStop's stock by several of its members.
Their discussions were full of ideas for the next big trade to jump on, self-deprecation and an appreciation of both winning and losing bets, as long as they’re bold. They’ve recently been encouraging each other to keep buying GameStop and push it ever higher, or to the moon.”
The soar in GameStop was the result of actions that appear to have helped fuel a so-called short squeeze in GameStop (GME) stock, where investors who had used options to bet against the stock needed to cover those bets by buying shares.
With millions of tweets, posts, explainers from prominent personalities and the netizens alike doing the rounds, the people of India found a connection with Harshad Mehta, a promising entrepreneur who would later introduce the word "scam" to the public of India. Mehta was accused of "market manipulation" as he used public bank receipts to control and manipulate Indian stock prices. The "Big Bull" of Bombay Stock Exchange was later convicted in several counts. A series based on him, Scam 1992: The Harshad Mehta Story, was met with critical acclaim recently.
Sir they just done a harshad Mehta by social media.. think if harshad Mehta has this power of social media .. amazing..
— sushant rana (@mangoman_twtr) January 28, 2021
In a sense, Harshad Mehta did back in the 90s what Reddit / WallStreetBets et al did yesterday, no?
— Kartikeya Tanna (@KartikeyaTanna) January 28, 2021
reddit did a classic Harshad Mehta move ngl
— Dakkksss (@Darddaaru) January 28, 2021
A Harshad Mehta Story Just Happened to Gamestop.
— uotecasm (@Shayarcasm) January 28, 2021
When I was a kid, my dad would tell me stories like the1987 Opera House jwellery store heist (which inspired Akshay Kumar's Special 26), Harshad Mehta, and the Chaddi-Banyan gang robberies...
I'm going to tell my kids about the Reddit Bros— Hamza Lakdawala (@hamzamlakdawala) January 28, 2021
While everyone is amazed by #GameStop those who were active in markets in 1992 (Harshad Mehta era) and 2000 (dot com bubble) will be feeling nostalgic (only diff is volumes and acceleration is much higher) Same cheap booze Expensive bottle
— Dinesh C Nagpal (@bluechips4u) January 29, 2021
Harshad Mehta be smiling down on Reddit shitposters rn
— Pranjal Poddar (@casual_pranjal) January 28, 2021
Same Story repeat. Bull vs. Bear#harshadmehta
This time money is available in abundance.Lets see where it gets ended. In the journey many sane ones will also get killed. https://t.co/3gwN0xrRVs— Learner Vivek Bajaj (@vivbajaj) January 27, 2021
Harshad Mehta did it before it was cool
— out of context dirgh (@DlRGH) January 28, 2021
Found a photo of r/wsb mods pic.twitter.com/1cHz0xmEWU
— Rounak Jain (@r0unak) January 28, 2021
So basically they did Harshad Mehta https://t.co/xxBhhqq5To
— chaitanya atre (@meetchaitanya10) January 27, 2021
Wish Harshad Mehta was alive today #GameShop
— Cycle Chain Sankar (@dakuwithchaku) January 27, 2021
Others, however, explained how the two instances weren't similar after all.
Nope hedge funds were deciding the fate of share thus company by sorting which huge amount to money in their hands resulting losses to common man. Now these common people united by buying these sorted shares in huge amount thus making them bakrupt. So this is justice of some sort
— Prashant प्रशांत (@prashant01979) January 28, 2021
Only difference being he consolidated bank money (which was people’s money) without their actual involvement. With Reddit it all came from decentralized sources, and that’s the ultimate difference ♂️. They’ll find a scape goat like they did with HM
— Aashay S. Doshi (@aashay_doshi) January 28, 2021
(With inputs from AP and CNN)