I don't know if I could condense it to below 5 or 6 paragraphs. :D
market is being thwarted from an intentional collapse to gain of a market fall by the DS
I know enough about stocks that they never just keep going up and 5%-10% corrections are healthy - small caps have been on a rocket ride since Nov. until a couple of days ago.
Believe Me, The market is due for a rest, now whether or not it goes deeper like last March is yet to be seen.
I’ve been trying on a couple places. So this is what is going on with GME and a couple other stocks.
Hedge fund shorted a stock. What this means is that they borrowed a share from someone who owns it and sold it at the current price expecting that it would drop in price and they could buy it back at a lower price and make a profit. That is a short sell.
However, what the Reddit and Robin Hood folks saw was that the stock was shorted by 150% of the shares available - which means that they either did a naked short (without a share available) or sold the same share twice - both of these are illegal by the way.
So when the short is that significant then if you can get enough buyers to jump in - (which in this case the reddit group is about 2M people strong) the price will rise. However the shorts have to cover if it goes up too much because there is NO limit to how much they can use - so the brokerages will call in the short if the amount goes to high against their accounts. The higher the price the more that these hedge funds stand to lose. The kicker is that when they start to try closing out their short position - which they MUST do by Friday (or whenever their brokerage makes the call on their account) their own demand will force the price even higher - especially IF no one is willing to sell their position.
This is a “short squeeze”. Some call it a Gamma short squeeze. As long as the holders of the stock don’t sell enmasse then the price must go up because the short seller HAVE to close their short positions by buying the stock. Since they OVER shorted it they are in a terrible position and the stock holders hold all the cards because there aren’t enough shares available for the hedge fund to close out their short position... unless the reddit/Robin Hood holder sell. Their target is $1000 by Friday.
There is a chance the SEC will step in to force a cap - but this would be against the market forces and basically a bailout by the regulatory agency. If that happens it means the markets - as well as the government are proving that there is a two-tiered system because they will not be allowing the market to set the price. Gonna be a helluva two days.
Other stocks are in play as well - though not oversold as much as GME. AMC theaters, Blackberry, and a few others range from 70-125% short stakes. The hedges made a bet they can’t cash and the retail traders have pooled together to hand them their backsides in a significant way legally.
I’m reading stories of college loans paid off, medical bills for family being paid, retirements funded, etc.... they are cashing small amounts to pay this stuff while holding onto the massive quantities need to prevent the shorts from closing. It’s amazing!