A hedge fund manager announced he was going to short GameStop stocks during the holiday season and the autists on r/WallStreetBets figured out that they had enough pooled resources to keep the stock from going down. This caused the hedge fund in question to become insolvent and now rich people are pissed that it happened and afraid that they'll organize to do something similar again.
It was also a naked short. Meaning they shorted more shares than the company had outstanding by around 30%. At the same time they were manipulating the market and doing behind the scenes strong arm deals to make sure GameStop tanked to bankruptcy despite having reasonable financials. Tens of thousands of jobs were on the line.
Now They literally can’t buy themselves out of this. Unlimited losses.
It was also a naked short. Meaning they shorted more shares than the company had outstanding by around 30%
Couple points of clarification. A naked short has nothing to do with the number of shares. Also, when you cover the short, you buy a position that goes back to the original owner. They buy themselves out by buying the same share multiple times. The problem is that the wallstreet bets crowd isn't selling so they have to buy on low volume which is making the price insane
A hedge fund manager announced he was going to short GameStop stocks during the holiday season and the autists on r/WallStreetBets figured out that they had enough pooled resources to keep the stock from going down. This caused the hedge fund in question to become insolvent and now rich people are pissed that it happened and afraid that they'll organize to do something similar again.
It was also a naked short. Meaning they shorted more shares than the company had outstanding by around 30%. At the same time they were manipulating the market and doing behind the scenes strong arm deals to make sure GameStop tanked to bankruptcy despite having reasonable financials. Tens of thousands of jobs were on the line.
Now They literally can’t buy themselves out of this. Unlimited losses.
Lol that is so dumb. They get what they fucking deserve.
Then their public shellacking was well-deserved.
Couple points of clarification. A naked short has nothing to do with the number of shares. Also, when you cover the short, you buy a position that goes back to the original owner. They buy themselves out by buying the same share multiple times. The problem is that the wallstreet bets crowd isn't selling so they have to buy on low volume which is making the price insane
Yes thanks for the clarification. Was trying to keep the technicalities to a minimum.
Thank you for that. (And LOL)
https://www.investopedia.com/ask/answers/how-does-one-make-money-short-selling/