Now a platform called Vinovest helps everyday buyers invest in fine wines - no sommelier certification required. This is what people mean when they talk about the “short squeeze.”įine wine is a sweet comfort in any situation - and now it can make your investment portfolio a little more comfortable, too. By gobbling up piles of GME shares and “call” options - which gave them the right (but not the obligation) to buy the stock at a predetermined price - they propelled the hapless GameStop stock upward, surprising everyone in the process, especially the short sellers. The Reddit short squeezeĮnter the Reddit community r/wallstreetbets, a raucous online investing forum full of ironic trading talk and elaborate memes of the type only Reddit could produce.Īlong with posters on some other investing forums, the wallstreetbets folks, for reasons known only to themselves, started an impromptu crusade against the GameStop short sellers. Basically, shorting a $10 stock that eventually drops to $5 nets the short seller $5 per share, less borrowing costs.īy the middle of this month, GameStop was the most shorted stock in the world. GameStop’s grim prospects made it a target of short sellers - that is, investors who borrow stocks they predict are about to drop so that they can sell the shares and then rebuy them later at a lower price. The brick-and-mortar retailer once held a significant chunk of the video game market, but due to the pandemic and competition from internet retailers, it’s been on the decline in recent years. Last year, things were looking grim for GameStop (GME), both on the stock market and with its physical business.
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