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Showing posts from May, 2021

Market Watch: r/WallStreetBets and the Great Game Stop Squeeze

The pandemic has seen to the rise of many ways to make a quick buck, be it grifting, scams, or investing. The latter has caused quite a stir in the marketplace, as first-time investors flooded trading apps such as Robinhood and Coinbase in the last few months.  In January of 2021, the reddit thread titled r/WallStreetBets hinted to its 2 million subscribers that major investors were betting on video game company Game Stop going bust. Major investors shorted Game Stop stock (this is when an investor borrows a stock, sells it, then buys it back to return it to the lender) with the hopes of seeing it collapse and to make a profit from the stock’s low price. Investors began to short more stocks, resulting in more short positions than actual shares. This resulted in a huge demand and low supply. Realizing this, r/WallStreetBets subscribers decided to buy the stock and hold it, causing the price to go up. This is called a short squeeze, where people with shorts desperately try to buy up ...