> The original shorting of GameStop back in 2021 gave them a bit of a boost back into the green.
IIRC, the short (borrowing stock, selling high, waiting for a downtrend, then buying low to pay back the borrowed stock buy an agreed date) was accelerating the fall of GameStop's stock price.
Then some Reddit knuckleheads noticed the hedge fund shorting GameStop was over-leveraged. They also found the deadline the hedge fund had to repay those shares to the bank.
The knuckleheads pumped the stock. Technical term: I like the stonk.
The knuckleheads then bought and held GameStop stonks. Institutional investors joined in. The hedge fund was legally obligated to pay any price to buy back the shares necessary to pay back the loan by the deadline. So the longer everyone else held on to the stonk, the more the hedge fund would be forced to pay. Squeezing the hedge fund in this way caused the stonks' price to temporarily skyrocket. Technical terms: hodl and rocket emoji
The original Reddit knuckleheads eventually stopped hodl'ing and sold high.
IIRC the hedge fund eventually went under.
Unfortunately, like all things, the knuckliest of Reddit heads would keep hodl'ing all the way back to the ground[1], hoping to cargo cult another squeeze by building wooden towers and dirt tarmacs to entice the sky rockets back. I'm not a stonk hodl'er, but I'd guess they are predominantly the ones who provided capital for Gamestop to buy Ebay. It's probably the most expensive and baroque way to fund a new consignment shop in your home town.
1: is there an emoji for a rocket crashing toward the ground? If not, there should be.
Eh. The capital was provided by various share offerings and, most recently, a bond sale, which retail probably and definitely did not buy, respectively.
But here's the fun part. All of those issuances were made during periods of weirdly high prices. The biggest one was this time 2 years ago. The price jumped to $80. Doesn't seem like much, but there was a share split in 2022, 4:1. Between that and the offerings, buying the same proportion of Gamestop The Company as one share did in late January
2021 would have cost about... $350? The intraday high from 2021? Weird. Oh, but it happened in after-hours. When non-institutional traders usually aren't active...
I don't think anyone truly knows exactly what's going on with Gamestop's stock price.
There is too much overlap with the tropes found in communities who want to believe in aliens and interdimensional beings to take the Gamestop saga seriously. So many appeals to emotion and ignorance, and the investment in a particular outcome has made the reddit groups around this topic indistinguishable from people who are ride or die Trumpers impervious to the falsification of their bad ideas. There is no longer a rubric of reasonable evaluation of new relevant information. The festering wound of people like Ken Griffin effortlessly getting away with their crimes has gone on for so long that has radicalized people to interpret every new piece of info through the lens of being the first crumplings of an eventual avalanche of retribution that has been promised to them.
I don't believe in the theory, I'm stating that I understand the theory to largely revolve around powerful players manipulating markets, such as robinhood to disallow buying GameStop in January 21. In my view, GameStop enjoyers are so thoroughly radicalized and primed to expect another short squeeze, that the content of any given days news, related to GameStop or not, is regularly deciphered as clear sign that of its arrival. A large part of that certainty has seems to stem from the fact that canonically guilty people like Griffin, remaining free, an ever present festering reminder of their grievance.
Well, yeah. It's an incredibly silly series of events. That said, I've lived through too much internet culture to confuse "seeing people drink the kool-aid" for a useful heuristic of if the cool heads who originated a notion were right. Weird ideas attract weirdos. Doubt the bunny-ears lawyers at your peril.
IIRC, the short (borrowing stock, selling high, waiting for a downtrend, then buying low to pay back the borrowed stock buy an agreed date) was accelerating the fall of GameStop's stock price.
Then some Reddit knuckleheads noticed the hedge fund shorting GameStop was over-leveraged. They also found the deadline the hedge fund had to repay those shares to the bank.
The knuckleheads pumped the stock. Technical term: I like the stonk.
The knuckleheads then bought and held GameStop stonks. Institutional investors joined in. The hedge fund was legally obligated to pay any price to buy back the shares necessary to pay back the loan by the deadline. So the longer everyone else held on to the stonk, the more the hedge fund would be forced to pay. Squeezing the hedge fund in this way caused the stonks' price to temporarily skyrocket. Technical terms: hodl and rocket emoji
The original Reddit knuckleheads eventually stopped hodl'ing and sold high.
IIRC the hedge fund eventually went under.
Unfortunately, like all things, the knuckliest of Reddit heads would keep hodl'ing all the way back to the ground[1], hoping to cargo cult another squeeze by building wooden towers and dirt tarmacs to entice the sky rockets back. I'm not a stonk hodl'er, but I'd guess they are predominantly the ones who provided capital for Gamestop to buy Ebay. It's probably the most expensive and baroque way to fund a new consignment shop in your home town.
1: is there an emoji for a rocket crashing toward the ground? If not, there should be.