The recent GameStop saga has cast a light on the trading platforms that offer access to the market for retail investors lacking the access to professional platforms used by their more sophisticated counterparts. However, the GameStop incident does not only reveal some fundamental flaws in the financial system or in the mission statements of these retail platforms such as Robinhood that likes to paint itself as revolutionary, disruptive force enabling the little guys to take on Wall Street. It also highlights another interesting phenomenon that many are more familiar with from the world of politics. Timo Löyttyniemi, CEO of Finland’s government pension fund VER, points out in his latest blog post that there were two unusual characteristics that defined the GameStop incident: lack of pure profit-seeking and the emergence of hate. “Hate speech pitting small investors against big ones created a David-and-Goliath situation. Some even mentioned anarchy,” he writes.
Over the past couple of weeks, I’ve had some interesting conversations with both day traders and financial professionals about the GameStop saga. As it now seems that despite the hype, it was the little guy who lost out to the bigger guy in the end. When retail trading apps such as Robinhood, which states as its mission to “democratise finance”, closed off trading to amateurs, professional investors were still executing trades worth hundreds of millions on platforms available only to them. David took on Goliath and lost. If only it was that simple. Many have pointed out that the leadersIf you’re new to Tell Media Group, create an account.
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