So many dumb takes on gamestonk. The left correctly acknowledges that gamrstop is a failing garbage company, then incorrectly blames retail investors. The right correctly points out that the stock was heavily shorted, but also incorrectly think retail investors and/or gamestop being a great company is responsible for the surge. So much facepalm.
Facts:
gamestop is a trash company and was probably overvalued at $20/shr
gamestop is 117% owned by institutions. This means retail investors have almost zero ability to move the price.
short selling is not a way that hedge funds "crash" a stock price, this is anti-capitalist nonsense. Shorting has identical effects on the market to selling a long position to take profit. The only difference between going long and shorting from a market perspective is that shorting has unbounded losses while going long has an upper bound of 100% loss. This means shorting is riskier for investors doing the shorting, and there are far more scenarios that force a short seller to buy to cover than force a long investor to sell to close.
short squeezes happen all the time. I made bank on TLRY in 2019. Google it.
the same media that lied to you for 5 years and talks about "full semi auto" and Trump being a "notorious war president" are telling you that the short squeezes will crash the market and retail investors on reddit started it. These people are lying/really stupid, nothing has changed.
Look for anything with the following combinations...
High short interest ratio (10 days or more)
High short interest (20% or more of float)
High % owned by institutions (80% or more)
Low float (small or microcap stocks)
The reddit vs wall street narrative is stupid, GME was 117% held by institutions so there is no chance in hell retail investors are behind that kind of price movement. 99% of the upward spike is caused by hedge funds being forced to buy to cover. Anyone claiming that short selling is bad in any way is also stupid, short selling is like any other form of investing and does not artificially drive down stock prices, and just like how you have to eventually sell a long position to cash in on gains, you have to eventually buy to cover a short position to cash in.
What is happening to Gamestop is called a short squeeze, and it is not uncommon. You get it when you combine the aforementioned conditions and the price goes up. Its a self inflicted wound caused by and sustained by institutions that short sell already heavily shorted stocks. Its a "buy off" that occurs just like a "sell off" but cascades much more dramatically because shorting has additional risk associated with it, shares can be called back, and margin calls. A squeeze is simply simply a stock "crashing" upwards in a chain reaction. It happens all the time, but unlike a downward crash, a short squeeze often corrects after only a few weeks. To see another great example of a dramatic short squeeze, look at TLRY in 2019. Just Google "TLRY stock" and expand the chart. Gamestop will be back to $20 in no time flat.
HCC, CAKE, BB, NOK and AMC are all potential short squeezes that may continue. Some may have run their course.
So many dumb takes on gamestonk. The left correctly acknowledges that gamrstop is a failing garbage company, then incorrectly blames retail investors. The right correctly points out that the stock was heavily shorted, but also incorrectly think retail investors and/or gamestop being a great company is responsible for the surge. So much facepalm.
Facts:
Look for anything with the following combinations...
High short interest ratio (10 days or more) High short interest (20% or more of float) High % owned by institutions (80% or more) Low float (small or microcap stocks)
The reddit vs wall street narrative is stupid, GME was 117% held by institutions so there is no chance in hell retail investors are behind that kind of price movement. 99% of the upward spike is caused by hedge funds being forced to buy to cover. Anyone claiming that short selling is bad in any way is also stupid, short selling is like any other form of investing and does not artificially drive down stock prices, and just like how you have to eventually sell a long position to cash in on gains, you have to eventually buy to cover a short position to cash in.
What is happening to Gamestop is called a short squeeze, and it is not uncommon. You get it when you combine the aforementioned conditions and the price goes up. Its a self inflicted wound caused by and sustained by institutions that short sell already heavily shorted stocks. Its a "buy off" that occurs just like a "sell off" but cascades much more dramatically because shorting has additional risk associated with it, shares can be called back, and margin calls. A squeeze is simply simply a stock "crashing" upwards in a chain reaction. It happens all the time, but unlike a downward crash, a short squeeze often corrects after only a few weeks. To see another great example of a dramatic short squeeze, look at TLRY in 2019. Just Google "TLRY stock" and expand the chart. Gamestop will be back to $20 in no time flat.
HCC, CAKE, BB, NOK and AMC are all potential short squeezes that may continue. Some may have run their course.