Bare-Knuckle Brawl Over GameStop Pits America's Elites Vs. ‘Deplorables'

Only someone living under a rock hasn't heard about the GameStop stock market shorting scandal.

First, in case you don't know what "Shorting" a stock is, it's basically borrowing a number of shares of a given stock to sell at the current price.

If the stock plunges in the following weeks to, say, $30 a share, that person could buy back the 100 shares and pay back the lender.

What if the stock rockets up instead? In that case, the person holding the stock could theoretically be on the hook for nearly unlimited losses as the stock soars.

What's different about the short squeeze for GameStop stock is that it's not big institution vs. big institution, but a bunch of no-name market guerrillas operating on a Reddit sub-feed called WallStreetBets that caused havoc among funds that had taken hefty, and very risky, short positions in the slumping GameStop.

All because an online group got tired of seeing its own stock go down due to short-selling, and decided as a group to buy the stock instead. As GameStop share prices rose, the short-sellers got hammered, and their losses were immense.

A number of online trading platforms, including Robinhood, shut down trading on GameStop and dozens of other "Volatile" stocks, in effect giving the stocks nowhere to go but down.

https://issuesinsights.com/2021/02/01/bare-knuckle-brawl-over-gamestop-pits-americas-elites-vs-deplorables/