It was quite a wild week in tech, with various worlds (mobile apps, financial markets, data and privacy) colliding in unexpected ways. Robinhood and Reddit unleashed a historic week for Wall Street, and Apple is getting really serious about app privacy. Let’s jump in!
Robinhood, Reddit, and the Big Market Meltdown of 2021
Mobile app Robinhood made it easy for anyone to trade stocks. Reddit allowed huge groups of like-minded people to congregate and coordinate online. Perhaps it was inevitable that those two forces would collide in a way that disrupted Wall Street.
While the full story behind this week’s financial chaos hasn’t yet been revealed (and, frankly, may never be fully known), what’s clear is that hedge funds and other Wall Street professionals decided to “short” the stocks of companies in a good deal of financial trouble, such as GameStop and AMC Entertainment. Shorting a stock means you make money when its price goes down. At some point, a huge crowd of people on Reddit realized what these hedge funds were doing, and decided to retaliate by using Robinhood and other easy-trade services to buy up massive amounts of those shorted stocks.
As a result of all that buying, the stock price of GameStop and a handful of other companies shot up, putting those hedge funds and professional Wall Street traders at a severe disadvantage—if you short a stock, and its price goes up, you’re the one who ends up paying instead of profiting. By late Wednesday, Robinhood and Reddit had taken the first and second positions (respectively) on the App Store’s bestselling app list, and GameStop’s stock had shot up to nearly $400—a stratospheric increase from $17 at the beginning of the year.
End result: Some Wall Street traders got a (metaphorical) black eye, and some retail investors/Reddit fans/Robinhood users saw their net worth leap up.
While it’s very easy to overstate the impact of something in the heat of the moment, we could be at an inflection point for mobile apps, online trading, and financial markets. It’s also a big moment for Robinhood, which halted trading on some of these “meme stocks” and might face blowback from its core audience as a result.
Apple is Forcing Developers to Become Privacy-Minded
This spring, Apple plans on finally rolling out a privacy feature that could seriously impact companies that monetize user data. App Tracking Transparency (ATT) will require that apps explicitly ask permission to track (and, presumably, leverage) users’ data.
According to The Verge, Apple is serious about the initiative, threatening severe penalties against developers (such as outright app removal from the App Store) who don’t ask their users for permission. Apple has also issued a nifty explainerabout how your data is used online, which is definitely worth a read.
“If a business is built on misleading users, on data exploitation, on choices that are no choices at all, it does not deserve our praise. It deserves scorn,” Apple CEO Tim Cook said during a speech in Brussels, according to CNBC. It seems he’s putting his company’s efforts where his mouth is.
Microsoft’s Minecraft Sustainability Report
Like many tech companies, Microsoft issues a regular Sustainability Report that breaks down its attempts to be environmentally responsible. This year, the company is taking things one step further, and turning many of the initiatives mentioned in the document (such as alternative energy sources) into elements in a “Minecraft” map (Microsoft, in case you forgot, acquired “Minecraft” creator Mojang back in 2014).
If the above image is any indication, the Microsoft/Minecraft Sustainable City looks very… blocky.
Have a great weekend, everyone! Stay safe!