'Not A Fair Market': Young Investors Say They Have Been Frozen Out Of GameStop Stock
BOSTON (CBS) – The battle between financial elite and small investors has put GameStop shares on a roller coaster.
"People in the establishment of Wall Street really are uncomfortable with the idea that regular people might be able to have some power," said amateur investor Chris Kropas, who just graduated from the business school at UMass Amherst.
Gaethen Lucien, who just graduated from Quinnipiac University, agrees. "It's pretty unfair to the average person like me that these hedge funds are getting saved at our expense," he said.
In a controversial move, the app Robinhood, which allows non-professionals like them to trade stocks, shut down GameStop trades. That caused the stock to lose almost a third of its value, one day after amateur traders banded together on Reddit in a buying frenzy, causing the stock to soar 6000%.
"That's not a fair market. It's not what a free market is," said Lucien. "It's pretty much market manipulation in my opinion," he said. Critics say Robinhood caved under pressure from so-called elite Wall Street investors who bet the stock would go down, and engaged in short-selling.
"Short-sell. What it means is you're borrowing money. But if that stock actually starts going down, your loss is infinity," said financial analyst David Caruso. "Now there's a war between the little guys and the big guys and the big institutions."
READ: GameStop Stock Surge 'Can Hurt Real People' Financial Advisor Says
"It's not trading at all. It's really gambling," said Massachusetts Secretary of the Commonwealth William Galvin, who called for Wall Street to suspend Game Stop trading. "It clearly affects…the longtime viability of pensions and others that have made significant investments," he said.
Millennials see it differently. "It's almost sort of reinforcing the idea that the stock market is only meant for millionaires to make more millions," said Kropas.
Thursday afternoon, Robinhood said it will allow limited buys of shares of GameStop and some other stocks on Friday, but it will monitor the situation and make more changes if needed.