The last few days have been buzzing in the financial market.
Gamestop. AMC. Short squeeze.
Those words have trended on social media in the last few days. Here’s what's been going down.
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Gamestock, a video retailer, has had its share price go sky high in the last few days.
Why is this so?
There has been a tug of war between two parties.
Large companies known as hedge funds versus retail investors led by wallstreetbets, a group on Reddit.
The hedge funds and a few other players in the market had shorted the stock.
Shorting, in essence, is a bet that the price of a stock will dip.
So, you borrow the stock, sell it, buy it back at a lower price and then return it to the lender.
The hedge funds decided to short the stock because it has poor fundamentals.
It struggled for a while.
So you would expect the price to dip, right?
A small band of investors on Reddit wallstreetbet, however, were furious by this.
So, they decided to buy up the stock, which pushed the price high.