For those how haven't noticed, something unusual is happening on the stock market these last few days.
The price of Gamestop shares have been rocketing through the roof. And a massive buying campaign spearheaded by the WallStreetBets subreddit is the reason why.
From Slate:
https://slate.com/technology/2021/01...tbets-gme.html
To overly simplify, traditional hedge funds took out short positions on Gamestop, a video game retail outlet in decline. Members of the wall street bets subreddit noticed this and decided to launch a leaderless, crowd-sourced stock manipulation campaign to boost the price of the shares. Retail investors are buying up GME shares and causing the price to spike sharply upwards.
The goal is to cause massive financial harm to the hedge funds that have taken out large short positions against the stock. If the price can stay high enough, long enough, these firms will be forced to pay out big losses. This is also comingled with the rush of people jumping on to the stock seeing it as a license to print money.
There is no actual business reason for gamestop shares to be priced this way, and eventually the buying spree will have to end and the price will collapse back to a normal value. But the goal of the buyers is to keep the price inflated long enough to bankrupt these funds that made risky short sales.
We're seeing the birth of a new type of stock market manipulation, one that will be difficult to contend with as it is largely crowdsourced and leaderless.
I have no idea what to make of this, but it is objectively hilarious that hedge fund ghouls are looking to lose their shirts to a bunch of keyboard warriors.
You can watch the price manipulation in real time. Stock sign GME. look at the 5 day or 1 month to see the massive buying spree.
https://finance.yahoo.com/quote/GME
The price of Gamestop shares have been rocketing through the roof. And a massive buying campaign spearheaded by the WallStreetBets subreddit is the reason why.
From Slate:
Quote:
|
Around this time, institutional investors, apparently including at least one well-known hedge fund, took out massive short positions against the stock, which trades as GME. These investors figured that amateur investors saw Cohen’s big name and ignored the difficult fundamentals facing the business, overvaluing the stock as they bought it up in droves. So the professional investors tried to make money off GME’s decline by borrowing the stock, selling it high, buying it back low, and pocketing the difference, minus the fees to borrow the stock. Lots of investors tried to short-sell the stock. (How many investors have “long” and “short” positions is not difficult to figure out.) As of Monday, 71.2 million shares of GameStop stock involved a short position, per Bloomberg, more than the total amount of publicly tradable shares, something that’s only possible because not all shares of GME are available for purchase. |
To overly simplify, traditional hedge funds took out short positions on Gamestop, a video game retail outlet in decline. Members of the wall street bets subreddit noticed this and decided to launch a leaderless, crowd-sourced stock manipulation campaign to boost the price of the shares. Retail investors are buying up GME shares and causing the price to spike sharply upwards.
The goal is to cause massive financial harm to the hedge funds that have taken out large short positions against the stock. If the price can stay high enough, long enough, these firms will be forced to pay out big losses. This is also comingled with the rush of people jumping on to the stock seeing it as a license to print money.
There is no actual business reason for gamestop shares to be priced this way, and eventually the buying spree will have to end and the price will collapse back to a normal value. But the goal of the buyers is to keep the price inflated long enough to bankrupt these funds that made risky short sales.
We're seeing the birth of a new type of stock market manipulation, one that will be difficult to contend with as it is largely crowdsourced and leaderless.
I have no idea what to make of this, but it is objectively hilarious that hedge fund ghouls are looking to lose their shirts to a bunch of keyboard warriors.
You can watch the price manipulation in real time. Stock sign GME. look at the 5 day or 1 month to see the massive buying spree.
https://finance.yahoo.com/quote/GME
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