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Although COVID-19 has impacted nearly every aspect of society, one of its major impacts was against businesses, especially small businesses. COVID-19 has caused a decline in the amount of consumers from small businesses across the country. This has led to many small businesses to be either on the brink of bankruptcy or even file for bankruptcy. GameStop and AMC were in this situation until the unthinkable happened.
Recently, many people who have hedge funds, an investment fund using borrowed money, believed that businesses like GameStop and AMC would go bankrupt. They essentially bet that the companies would go bankrupt, so if they did, the hedge funds would gain money.
However, a Reddit group of participators in the stock market, called WallStreetBets, wanted to stop these hedge funds, so that they would not make money off of small businesses on the brink of bankruptcy. They would do this by buying several GameStop and AMC shares, known as “meme stocks,” and trading them
on different stock trading apps. This effectively increased the amount of money that GameStop and AMC had been receiving. This meant that there was not a risk for bankruptcy for these businesses and they were able to maintain their business.
Although these small businesses do not have the risk of going bankrupt right now, this could quickly change. With the often fluctuating stocks on Wall Street, the companies could either keep increasing in the amount of money they earn, but there is the same chance that they may decline and look into bankruptcy’s eyes once again.
Now that GameStop and AMC are back on their feet, they look to maintain their financial position as economically-stable businesses. As more money keeps moving towards these businesses, they can hope for more customers to follow.
As GameStop and AMC come to the end of a historic couple of weeks on Wall Street, they look to maintain their dominance in the stock market and financial stability.