The most epic battle between retail investors and hedge fund billionaires is playing out right now.
I know a lot of people don't pay attention to or understand the stock market so I will try to explain this as best as possible.
A retail investor is basically the common person who invests in the stock market. Then you have the billionaire hedge fund managers and MM (market
makers). And the most hated of all, short sellers.
Short sellers suck. In the most basic terms they borrow shares from a lender and immediately sell them. Trying to drive the share price lower. At
which point they will buy the stock back at the lower price and pocket the difference. Example. You borrow 1000 shares at 10 dollars a share.
Immediately sell them. That gives you $10,000. If the share price drops to 5 dollars and you buy the 1000 shares back for $5,000 you get to keep the
other $5,000. But if the share price goes up you are screwed. Remember this is all scalable. Hedge funds and institutions trade 100's of thousands of
shares. There is big money at play.
What is going on is called a short squeeze. A short squeeze occurs when a stock jumps sharply higher, forcing traders who had bet that its price would
fall, to buy it in order to forestall even greater losses. Their scramble to buy only adds to the upward pressure on the stock's price.
That brings us to Game Stop. Just a few months ago the share price of a game stop share was about 3 dollars. This is a brick and mortar store that
sells games. In a time where more and more people buy their games digitally. This isn't about GS being a good business to put money behind. These
retail investors are engaged in an uprising against the establishment.
At the time of writing this thread game stop share price is currently at $358!!!
Now imagine being short at 20 dollars a share times
10,000 shares. This is premarket so prices are all over the place right now.
A bit of how this was all started and set up.
This past August, as Gamestop the stock failed to keep up with a broader equities market that was heating up, former CEO of pet food e-retailer
Chewy Inc. (NYSE: CHWY) and generic venture capital type guy Ryan Cohen started accumulating shares until he owned 12.9% of Gamestop. In November, he
started what might be called an activist investor’s campaign, in which an investor buys a not-insignificant stake in a company, then makes a
nuisance of themselves, publicly questioning management’s aptitude and agitating for control of the board of directors.
Sometimes, the activist investor pushes his fight for the hearts and minds of his fellow shareholders all the way to a proxy fight at the annual
general meeting, but Gamestop didn’t put up much of a fight. Cohen was given three board seats on January 11th by a board of directors that seemed
like it didn’t really know what it was going to do in the first place, and was happy to shirk responsibility to someone who seemed like he
This is about CITRON the billionairs hedge fund trying to short the stock
the firm’s short position in a January 21st video. Within, Citron Research Founder and Executive Editor Andrew Left outlines the various reasons
he’s short GME, prefacing it with an emphatic pronouncement that there is NOT a short squeeze in GME, so you can forget about it being a short
squeeze, because a short squeeze isn’t what this is.
These are the smug A-holes that think they know better than everyone else
Game Stop closed at $61.50 on Friday 1/22
Monday 1/25, with an even larger spotlight on the trade, GME blew up to $159.18, eventually settling at $76.79.
I thought it was over at that point and it would fall back to earth. The shorts had doubled down and were ready to battle it out longer
Last night in after hours trading it spiked to over 200
This morning when I woke up it was above 300
It has now dropped to 250 while writing this thread.
Today will be another battle between the longs and the shorts. The shorts have already lost billions.
To all the new millionaires. The hedge funders do not hold the power when the little guys stick together.
edit on 27-1-2021 by
FauxMulder because: (no reason given)