Once again, the power of social media cannot be underestimated. In this case, this is the story of a Reddit community call Wall Street Bets fighting well established Hedge Funds over GameStop, a video game retailer that financially, had its days numbered.
Fascinating to watch and even more interesting as the story develops and more details become available. Hedge funds, have traditionally OWNED wall street and steer it in any direction they want. Shorting a stock -essentially betting that it will go down significantly over a short period of time- has always been a way to rack up significant profits… UNLESS… the stock goes UP, and up and up, and you end up having to ‘cover’ your short resulting in a significant loss.
And that’s exactly what happened this time. David beat Goliath and the Wall Street Bets group got together and decided to buy GameStop shares massively, raising the stock price so much, that it caused sophisticated investors like Melvin Capital and Citron Research to cover their losing positions in what’s known as a short squeeze.
But there’s so much more to this story, and we don’t know how it’s going to end… Take a listen and let us know what you think!
Manuel Gil Del Real is the owner of MGR Consulting Group, an Interactive Marketing Agency providing marketing solutions to companies worldwide. He’s also an auto racing enthusiast and a blog author who enjoys sharing his thoughts and ideas on eCommerce, SEO, Social Media, Website Design, Video Marketing Internet Marketing, entrepreneurial advice, lifestyle and travel experiences among many others.