Hello my beautiful students and welcome back to English News Pod, the best way for you to learn practical English through the news. I’m your host and teacher, Caroline.
I’m so happy to be back podcasting and so much has changed in the past few months. I moved back to the US from Turkey, I started a new job, and I started new hobbies, like running. Anyways, I hope you’re having a great 2021 and thanks for listening!
Now, let’s take a look at today’s top news. You can find a full transcript of this podcast episode in the description.
Earlier this week, the little people of Reddit crashed Wall Street. How, you might ask? Redditers noticed GameStop, a failing video game store in the US, had a stock that was overly ‘shorted’ by large hedge funds. When a stock is shorted, it means that investors borrow shares only to sell them immediately, in hopes to buy the shares back later at a lower price. Investors typically short stocks that are expected to decrease, so the investor makes a profit. In this case, GameStop was expected to have its stock continue to decrease because it is a failing company.
However, ordinary people noticed the extent of the short, banded together on Reddit against large hedge funds, and started to buy large amounts of GameStop shares. The impact has been incredible, with small-time traders outsmarting Wall Street and earning billions of dollars, resulting in the hedge funds losing billions of dollars.
For reference, GameStock’s share cost was $4 last year, but due to day traders’ interest in the stock, it rocketed to over $450 per share in just over one day. There has been a lot of fallout from this event, including questions about regulation and power, especially after the popular trading app, Robinhood, stopped allowing the stock to be traded. However, it is still too soon to tell what will happen next in this story.
Let’s take a look at some grammar:
- The phrase “The little people” doesn’t actually mean small people, it’s a phrase to describe normal people, people like you and me.
- To borrow - a verb that means to take something, use it, and have the intention of returning it. Have you ever had someone borrow your pen, and never return it? Ya, it makes me sad too.
- Ordinary - ordinary means normal, so here, we are talking about ordinary, or normal people who bought shares of GameStop.
- To band together - is a phrase that means to work together, typically for a shared goal, and often against a common enemy.
- Day traders are people who buy and sell stocks within the same day.
- Small-time is an adjective meaning small or unimportant. In this case, we are talking about small-time day traders, who are extremely small in comparison to large investors of Wall Street.
- To outsmart - a verb that means to be smarter than someone else. For example, the day traders from Reddit outsmarted the investors on Wall Street.
- Fallout - a noun that has 2 common meanings. The first meaning is usually in relation to nuclear disasters and the spread of radioactive particles. The second meaning is used to describe the negative consequences, or effects, of an event or situation. Here, we are talking about the effects, or fallout, of the ability for normal people on Reddit to influence the market so quickly.
That wraps us up for today. If you liked this podcast, please subscribe and leave a review. Thanks for listening, and I will see you soon for more news in English!