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God "Bless" Shorters
In early January, GameStop was trading around $18. Suddenly, Wall Street can't stop talking about this stock. The internet has been used to prognosticate about stocks for decades, but there's never been anything quite like the Reddit community called r/wallstreetbets, also known as WSB.
Instead, it’s what is fueling that rise: concentrated buying by thousands upon thousands of small individual investors who are using sites like Reddit and Robinhood to drive up what are now being called “meme stocks.” GameStop is the best-known of these meme stocks
$GameStop (GME.US)$ was one of the most shorted of all publicly traded companies. Other companies include $AMC Entertainment (AMC.US)$ , $Bed Bath & Beyond Inc (BBBY.US)$ and even the mostly defunct Blockbuster. Remember those names.
And then GameStop became the source of a short squeeze.
And then GameStop became the source of a short squeeze.
GameStop didn’t stop— it strangled the shorts.
I believe retail investors who traded $WallstreetBets(BK2555.US)$ all know what is a squeeze. It's a way of trading but it looks bloodthirsty in the
showdown.
showdown.
Whats more, Robinhood and Interactive Brokers have become the latest platforms to restrict the trading of several highly shorted stocks following an unrelenting trading frenzy led by retail investors and day traders.
What happened Friday?
GameStop shares would go from trading at around $43 (already significantly more than it traded at at the beginning of the year) to as much as $380, becoming one of the most traded stocks on the market along the way.
Tesla CEO Elon Musk, the world's wealthiest person, who has also publicly battled short sellers, tweeted out Tuesday, "Gamestonk!" with a link to WSB. Gamestonk is a reference to GameStop and to "stonk," internet slang for stock.
Does this matter to ordinary investors?
Yes. For one thing, the volume of trading has strained the computer infrastructure of online brokerages.
And at least on paper, ordinary investors are making money even if they're not involved in. BlackRock, which operates mutual funds, may have made billions of dollars from the rise in GameStop shares alone.
But the bigger and longer-lasting impact may be on how the market itself operates. Never before has a group of amateur investors taken on a hedge fund like this and won. The battle over GameStop has taken on something of a David vs. Goliath feel, with some people outside of finance painting it as a reckoning for parts of Wall Street.
How will the market be different after this?
There is some belief that WSB signals the arrival of a powerful new force as large numbers of retail investors find influence by acting in concert or following one another into a big trade. That may serve as a check or balance on other large forces, such as hedge funds, which are used to throwing their weight around without ordinary investors affecting a price.
How does this end?
Often, a short squeeze ends in a price's falling back to where it was before the drama started. In 2008, when Volkswagen was in the middle of a trader tug-of-war, it briefly became the stock market's most valued company, but its price settled down eventually.
History suggests that no stock can go up forever, and over time, stock prices generally reflect the expected future earnings of corporations. But long shots can go on for extended periods if the players have enough resources to risk.
Is someone going to shut this down?
There's no evidence that any of this is illegal, although Nasdaq CEO Adena Friedman has said stock exchanges and regulators need to pay attention to the potential for schemes fueled by social media.
Reddit didn't answer questions Wednesday about whether it's in touch with regulators, but it said it prohibits posting illegal content or facilitating illegal transactions. "We will review and cooperate with valid law enforcement investigations or actions as needed," Reddit said in a statement.
Galvin said he believed federal regulators would take some action. White House press secretary Jen Psaki said Wednesday that the Biden administration's economic team was "monitoring the situation" around trading in GameStop.
Citron announced they wont continue short selling research anymore this morning.
No one knows what will happen next. But you can stick to your choice or continue to be an ordinary investors. Who will be domin
ant this showdown? Time will tell.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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FiveHundredCents
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Meltyy : WE WILL WIN
搞经济 抄底 加仓 : One for All, All for One
We're Backed by TSLA, MASK..
treydongui : I'm not against Wall Street bets as they brought many retail investors together but my problem is by the time we get the signals you're lucky if you profit. Usually comes with a few days of stress also. no in my mind all that does is group retail investors together so they can more easily short them
treydongui : now this way they won't have to over short the market. Thanks Wall Street bets
treydongui : so do have more than enough Capital the next time we try to make a run on a star tips for all grouped up in blasting it all over social media. Well we're not but what we're buying is being blasted so think about it for a minute
treydongui : now that will be nice and grouped up together and have a huge public eye on what stocks were watching this should be able to concentrate their money much better to effectively short us.? so for instance instead of shorting 100 stocks which they really couldn't afford now all they have to do is short 10