A lot of people who helped to drive up the price will end up losing money. As the selloff begins, the pipe will not be big enough to get many of them out fast enough. Also, even though the main target was the hedge fund, there were some smaller investors who will likely lose their homes and much of their entire portfolio, if they were also shorting the stock.pineknollshoresking said:Agree, at some point the Reddit guys are holding stock that is over valued. What I like is that they "kind of stuck it to the man" and caused harm.FlossyDFlynt said:
Good Twitter thread explaining whats going on
TLDR version - hedge funds shorted the stock (borrowed shares banking that the stock will tank, they can sell at a cheaper price and pocket the difference) and the Reddit crowd bought all the shares and refused to sell, jacking up the price. Well, the options expired and the hedge funds owe the difference, thus creating a huge loss for the hedge funds. And now some hedges are doubling down with the prices skyrocketing on the stock.
Its basically one gigantic game of chicken. Someone is going to get stuck with the bill at some point
The CNBC's of the world are all raising hell over this. One guy said: these people (Reddit people) are using this like a casino. I'm sorry, but that's all a Hedge Fund group does is use the market as a casino.
None of us have the access to the markets the same way investment houses have. This, in my opinion, was a populist movement and the Elite's don't like it! I say GOOD!
Shorting stock can be high risk and the chances of losing everything is real. If you are not prepared to lose large sums of money, you should not short stock.