![]() Critics see short sellers as vultures who contribute no value to society although supporters argue they help in price discovery and make markets more efficient.Īs professional traders and, latterly, more retail buyers from forums like WallStreetBets piled into the market late last year, GameStop's shares rocketed from $4 a year ago to $19 at the turn of the year and $347 on Wednesday.Īmerica’s most shorted stocks have strongly outperformed market benchmarks since November. But if the price rises they have to pay more for the share and lose money. ![]() ![]() Short sellers borrow shares and immediately sell them at the market price in the hope of buying them back at a lower price and pocketing the difference. They are the subject of substantial short positions - bets made by hedge funds that their share prices will fall. GameStop and other firms backed by the WallStreetBets crowd have one thing in common. Ryan Cohen, a 35-year-old investor and GameStop’s biggest shareholder, was at one point sitting on reported gains of $3bn. One of the forum’s key players operating under the username DeepF-ingValue posted screenshots on Wednesday apparently showing a $33m gain on a $755,000 investment in GameStop, which trades under the ticker GME. The WallStreetBets phenomenon is creating its own celebrities. As GameStop’s share price took off, he fuelled the surge with a one-word tweet on Tuesday to his 43m followers: “Gamestonk!!” Tesla founder Elon Musk is another hero of the WallStreetBets brigade. The SEC’s interest was prompted by a meteoric rise in the shares of GameStop, an unremarkable and unprofitable video game retailer whose valuation jumped about 2,000pc this month as armchair traders piled in. They trade using commission-free online platforms and apps aimed at retail investors, such as Robinhood.įor all their differences from the internet bros storming the stock market, the Wall Street suits may at least relate to their taste for profanity.Ī report that the US Securities and Exchange Commission (SEC) was reviewing WallStreetBets, the Reddit forum at the heart of this week’s market turmoil, was greeted with an online post inviting the regulator to “go f- yourself”. Instead of communicating privately through $24,000-a-year Bloomberg terminals, the upstarts post on Twitter, Reddit and Discord. Wall Street traders plot graphs, bury themselves in spreadsheets and are often highly secretive about their business but the “meme traders” upending stock markets this week do things differently.
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