Robinhood, an interactive, low-commission brokerage service that allows people to trade stocks and other financial instruments, has halted all buying and selling of equities for GameStop, AMC and other companies Reddit users have been pumping for the last few weeks.

This move comes in response to the way in which Reddit and 4chan users have teamed up to collectively push up the price of these shares in order to shake some large hedge funds out of their short positions.

The Gamestonk Saga

The whole saga, jokingly referred to by the participants as “Gamestonk,” began earlier in January when a few 4chan users and members of the Reddit group WallStreetBets noticed some bizarre action surrounding the GameStop (GME) stock and decided to take advantage of it.

These users noticed an enormous amount of short interest in these shares from various hedge funds, especially one named Melvin Capital. This means that hedge funds like Melvin believed that the price of GameStop shares were going to fall in the future, and so they borrowed shares from others, sold them at the current price, and agreed to return the shares at some future date to the original owners. If the price fell by that date, Melvin would pocket the difference. This is called short selling.

However, the Redditors and 4chan users noticed that Melvin had shorted more shares of GameStop than actually existed on the market — around 140% of the total. This is called naked short selling.

It was there that the idea was hatched to have as many users as possible buy up GameStop shares to inflate the price. When the time came for Melvin and other hedge funds to cover their shorts, they would have to pay enormously inflated prices and would lose incredible amounts of money. As of 1:30 pm, Eastern Time on January 28, shares of GME were selling for about $235. The peak occurred on the morning of January 28 when the shares hit $483. Three weeks ago, the shares sold for less than $20.

Many on the threads are doing this just for laughs, but just as many seek to make a political statement. Since none of the major Wall Street CEOs were made to suffer in any way for the financial crash of 2008, these people want to make the fat cats pay and show that even the little guy can wield financial power.

The Wall Street Elite Responds

Predictably, the elite are responding. Articles in mainstream financial news outlets like Bloomberg have been calling these activists “nihilists” and “financial terrorists.” They have alleged totally unsubstantiated connections to Russia and have even tried blaming Donald Trump for what is happening. The Biden Administration says that it’s “monitoring the situation,” and inevitably, the government will be asked to intervene to protect the elite.

For now, brokerage houses are responding. TD Ameritrade and even Robinhood have halted trading of GameStop and AMC shares. E*TRADE still allows users to trade in them, but may eventually call a halt to this as well.

The financial elite are closing ranks, but there may be hope for the little guy coming from Asia. Cryptocurrency investor Jason Sun has recently offered to invest $1 million into GameStop shares, and it seems that the Asian market — which U.S. regulators cannot control — will be jumping in on this as well.

It’s fascinating to see globalization actually work out in favor of the little guy for once.