Reddit traders wage battle against Wall Street
An army of amateur traders has launched a siege on Wall Street that has shaken up markets and left seasoned hedge funds reeling.<p>This new legion of day traders, equipped with free trading platforms, spare cash, and boredom, has set its sights on a growing list of US-listed companies over the past several weeks.<p>GameStop, a games retailer whose shares have been sent flying by gangs of traders co-ordinating moves on Reddit, sits at ground zero of a battle that has shown these have-a-go investors are no longer just a sideshow.<p>The impact is now spreading to other stocks and tripping up sophisticated hedge funds that take pride in their superior skills at navigating markets. Alarm bells are ringing among investors and former Wall Street regulators who see worrying parallels to the pump-and-dump schemes that proliferated in the dotcom era.<p>“The people who get hurt on these things . . . are the people who buy at pumped-up prices thinking they’re on a rocket ship ride upward and in fact that rocket ship is going to crash,” said Steve Cutler, a partner Simpson Thacher and former enforcement chief of the Securities and Exchange Commission.