History suggests that no stock can go up forever, and over time, stock prices generally reflect the expected future earnings of corporations. 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. Often, a short squeeze ends in a price's falling back to where it was before the drama started. 'They think they're missing out if they don't make a bet.' How does this end? 'The current pandemic has created a unique situation where many people who have gotten into day-trading really have no idea exactly what they're doing,' he told CNBC. Massachusetts regulator William Galvin compared the situation Wednesday to the 1999 tech stock bubble. 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.

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. How will the market be different after this? This is something to believe in,' he said. 'And it's a perfect storm at a time when lots of people are hurting, interest rates are so low, inescapable student loan debts loom, and every major institution has caught during a /global pandemic/ over the last year. Or, as Reddit co-founder Alexis Ohanian put it on Twitter, the GameStop squeeze is 'the public doing what they feel has been done to them by institutions.' Gotta admit itвЂ™s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino- Alexandria Ocasio-Cortez January 27, 2021 That caused some short sellers to abandon their positions, helping to drive the stock up more in the following days. 11 after it named three people to its board of directors as part of a deal with shareholders who had been agitating for change. This is where things get a little complicated and a bit more unclear. So what if a bunch of people bought GameStop stock? It lets people trade stocks and even more exotic investments, like options, for little or no charge. There's also Robinhood, the app that is the unofficial stock trading platform of choice for WSB. On Wednesday, the people who run WSB temporarily made the community private and said they were 'experiencing technical difficulties based on unprecedented scale as a result of the newfound interest in WSB.'

'100% of my portfolio on GME because of you idiots,' a person posted Jan. As the price of the shares rose, more WSB posters jumped on board. Its slogan is 'Like 4chan found a Bloomberg Terminal,' alluding to the fringe message board and the Bloomberg computer system that is nearly ubiquitous in finance.ДЄmateur investors on WSB have discussed GameStop (which they refer to by its stock ticker abbreviation, GME) for years, but things changed early this year. WSB takes something of an internet extremist's approach to investing. 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.

S3 Partners, a financial data company, said Wednesday that its analysis found that short sellers had lost $23.6 billion on GameStop this month. The speculative trading left short sellers with no more shares to buy to cover their positions, creating a short squeeze and leaving them with millions of dollars in stocks they had bought at a high price but which they then had to offload at an even higher price. In the case of GameStop, chatter on massive online trading forums invigorated interest in buying the stock, pushing up the price, which in turn fueled more interest. Any positive news or enthusiasm for the stock will push up the stock's valuation, minimizing profit for the short seller.

Because short sellers - frequently hedge funds - in essence are betting against a company's success, it can be a risky position.

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