I've got a bridge to sell you.
117% held by institutions. That is all you need to know to figure out the media is trying to sell you more bullshit. This isn't "digital soldiers battling it out with wall street."
This is a classic short squeeze. GME was primed for it with a HUGE amount of its float sold short. Funny thing about shorting, its a lot like taking a position on margin. The shares you sell short are borrowed and therefore can be called back, forcing you into a loss. Whats more, the theoretical bounds for upside potential are limited, while losses are unbounded (it is the inverse of a long position.) Andrew Long, Melvin Capital Management, and more closed short positions on GME at 100% losses. If they hadn't, they could have had losses much bigger, and the fact they closed at -100% is telling. They had risk tolerance limits in place on their positions, because you have to when shorting.
Large hedge funds closed huge short positions which has the same effect as funds taking big long positions, it drives the price higher. However with long positions, funds typically distribute large purchases or sales of stock over time to reduce the impact on stock price. When your short position is forced to cover or you panic cover, you buy a large amount all at once, sending the price skyrocketing. With a high short interest company, small price movements to the upside can trigger massive chain reactions as larger and larger funds with higher and higher risk tolerance are forced to buy to cover, causing the stock price to go parabolic.
What happens afterwards is obvious. The stock price peaks. Momentum dies. And it does a dramatic reverse to the downside. GME is a horrible, horrible company. The price will by below $20 a share by next year. Dont believe me? Look at TLRY from 2019 to today. That is a classic short squeeze.
Reddit's involvement in this is minimal at best. This was wal street's own doing, taking massive short positions in an already heavily shorted stock and not thinking about what happens if the price starts to go up.
This post is correct. This stock was mega shorted by big money (institutional investors and hedge funds) and had a really low float....meaning it was ripe for the short squeeze. For an epic short squeeze.
Normally, no retail investors have enough capital to even coming close to moving the market of even a single security...but when the float is low, and everyone teams up and gangs up...you can trigger the unstoppable avalanche that is the short squeeze. This one just happened to be mega shorted on low float...hence the astronomocal climb in price as big money is forced to cover their asses or fave margin calls and devastation....Im sure a lot of them goy burned hard.
But, yes, as was stated, the price is going to come crashing back down to $20 or less again very shortly. Back down to the actual intrinsic value of the security...
Now would be a great time to short it again if you could or buy PUTS on it a few months out...if you could...
The initial money getting on the short squeeze is over now as the big money covered their positions....and now there is no more short squeeze to take advantage of. I hate when shit like this happens on the actual security and not s derivative....
With options, everyone knows its a zero sum game...
Not so with stocks that have shareholders and represent a a real value...