What is GameStop?
GameStop is an American high street shop that sells games, consoles and other electronics.
The sort of thing you’d find between a doughnut shop and a makeup retailer in an American mall.
It’s not anything new and exciting, in fact it wasn’t doing very well because of the pandemic.
What’s it got to do with Reddit?
If you’re not on Reddit, it’s a social media site – kind of like Twitter or Facebook.
You join forums about particular topics you’re interested in.
There are Love Island forums, football forums, history forums – you name it.
The one that’s important in this story is called wallstreetbets. More than four million people are in it, usually discussing stocks and shares and where they’re going to invest money.
If you’re still confused, it’s analogy time.
Imagine you borrow some Pokemon cards from a mate, because you think the price of them is about to drop, and agree to give them back in a month.
Then you sell them to someone else for £5 per pack.
You work on the assumption that you’ll be paying less than a fiver for them after a month when they’re not so new and exciting anymore. Let’s say you buy them back for £3.
Congratulations, you’ve made £2!
This is a massively simplified explanation of something called shorting, or short selling – words you might’ve seen cropping up in your feeds in the last few days.
Think of it as gambling. If your bet was wrong and the price actually rises instead of falling, you’d lose money.
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