BOSTON (CBS) – The hottest stock right now is GameStop and it has nothing to do with the company’s performance. A strange phenomenon has hit Wall Street and it’s driving up the prices of some struggling brands. But it could end up costing people a lot of money.
The release of the PlayStation 5 brought a flood of shoppers into GameStop locations, but it’s not the secret of the stock’s sudden success.READ MORE: Woman Hit And Killed After Getting Out Of Friend's Car On I-93 In Medford
It started on Reddit. Users urged each other to buy up shares and they did.
Larry Glazer of Mayflower Advisors has seen it firsthand. “I knew I was in trouble when my 13-year-old son came home last night and he said, ‘Dad I’m trying to decide whether to mine Bitcoin or buy GameStop stock.’ So that was my first pause,” Glazer said.
The stock is up 6000% since its low point last summer.READ MORE: Coronavirus In Massachusetts: Today's Developments
“It’s really the revenge of the day traders, and they are going after the most hated names on Wall Street,” Glazer said. “The most shorted stocks.”
It cost those professional traders big money, because they bet the stock would stay low. But Glazer says this will have consequences for people who jumped in and bought shares when reality sets in.
“It can hurt real people and it can hurt the hardworking savers at home and the people that really want to see a more rational environment,” Glazer said. “You know investors, we had a lot of phone calls today from people who were very concerned about what they’re seeing in the markets, because it looks like a casino. And if they want a casino, they can go to Everett. They don’t want to see it in their 401K and they don’t want to see it in their retirement account.”
This isn’t just GameStop. Reddit users have started encouraging people to buy shares in Blackberry and AMC theaters.MORE NEWS: 'It's Panic': CareWell Urgent Care Patients Concerned 2nd Vaccine Doses Will Be Canceled
Massachusetts Secretary of State William Galvin is monitoring the situation and has called for the New York Stock Exchange to suspend trading in GameStop for 30 days.