For those that don’t really know much about what’s going on, essentially these billion dollar hedge funds were betting that GameStop (GME) was going to continue to lose value. They used a type of speculation called “short sale” where they borrow a stock from a broker, then wait for the price to drop, before they give it back and pocket the difference. They bled GME dry to the point where it was around 3.00 a share.
They doubled down. They blew past the 100% available stock cap of GME to the point where now they owe on stocks that essentially aren’t there, around 140%. Frankly, that shit should be illegal.
Que WallStreetBets. A sharp user known as DeepFuckingValue noticed a little over a year ago that these hedge funds had severely overextended themselves. He put a good amount of money into their stock and posted a whitepaper to WSB about his logic for doing so.
WSB saw that his reasoning was sound, so they started buying long term stock in GME. The thing about shorts, is that if you’re holding them and the price rises, you’re on the hook to pay your broker back for what you borrowed from them. Multiply this by millions of shares, and you have hedge funds shitting their pants watching their funds being bled dry by a bunch of internet peasants who call each other stupid names on a Reddit forum.
They did it to themselves. Their greed was noticed and now people are punching back at them.
Oh, and DeepFuckingValue’s portfolio is currently sitting at 50 million.
The Robinhood App has banned buys of GME, AMC, BB, and NOK. They are literally stopping people from executing further trades. They are actively protecting the hedge funds that by their own poor management, put themselves in this position. Robinhood should be nuked into oblivion for this.