[Incognito_lad6]

Can someone explain to me what happened because i know that it has something to do with people not selling stocks because they got pissed back in 2008

[harolde157]

Hedge fund decided that Gamestop was in bad shape and would eventually go out of business. So, they bet on that. They "borrowed" GME stock and immediately sold it. For this example, let's say they sold it for $10. Their next step would be to watch the stock fall more. Then, they would buy it back at a lower price, call it $5, "return" the GME stock, and pocket the $5 difference.

Meanwhile, people online didn't like that Wall Street was betting on something like that, so what they did was buy shares of Gamestop. Lots of them. As a result, the original $10 stock did not drop to $5 as expected, but instead increased to $500.

Now the original hedge fund, who still needed to "return" the stock it had originally sold for $10, needed to buy it back at a significantly higher price. Rather than profiting $5, they now had to SPEND $495 to get it back.

Now, imagine that with hundreds of thousands of shares.

The hedge fund had to restructure their entire company to stave off bankruptcy.

[Incognito_lad6]

ngl thats actually kinda cool, is this going to happen on a regular basis now or is this like going to be a one time thing?

[harolde157]

People will try. Probably wont be as successful now. Shorts have always had a big amount of risk associated with them.

[Incognito_lad6]

aaah, alright cheers