The WallStreetBets traders didn’t stop there. The world’s richest man, Elon Musk, added even more fuel to the WSB inferno by tweeting his support with the word “ Gamestonk!” – a deliberately misspelled version of “stock” popularized by an internet meme. Cohen’s 13% stake in the company is now worth $2.5 billion. In nine days, GME stocks skyrocketed over 1,800% from $19.79 to a high of $380. Related: Market Wrap: Bitcoin Reverses Wednesday’s Losses, Ether Climbs If they’re successful, they hand the initial borrowed amount back and pocket the difference. When institutional investors short-sell a stock, what they actually do is borrow a number of shares they believe will drop in value, sell them at the highest price possible and try to buy them back later at a lower price. A short squeeze might sound complicated but it’s actually a relatively straightforward process. The WallStreetBets Reddit community saw this as an opportunity to push back against the financial elite and decided to whip up a buying frenzy in the hopes of creating a major short squeeze. This was likely an attempt by large players to out-muscle amateur traders and induce panic selling. 11, causing the stock price to soar 50%.Įven after Cohen joined the board and the stock price began to rebound, a handful of hedge funds and other institutional investors continued to short-sell GME stock. – later joined the GameStop board along with two former associates from his pet health products company on Jan. Cohen – the largest individual shareholder of Apple Inc. The author noted that GameStop stock was being heavily sold short at the time by a number of institutional investors, despite the fact “their books are rock-solid” and Chewy CEO and co-founder Ryan Cohen had spent almost $76 million for a 12.9% stake in the company.

Related: US Congress Plans Hearings on GameStop Market Pumps Since November 2015 the company’s stocks had been steadily declining due to a shift from physical media to digital, and the arrival of the COVID-19 pandemic. 19, 2020, a Redditor with the handle Player896 published a post in the channel entitled “Bankrupting Institutional Investors For Dummies, ft GameStop.” In it, the person outlined a strong bullish case for GameStop (GME), a brick-and-mortar business that primarily sells video games and consoles. Described as “like 4chan found a Bloomberg Terminal,” the community has caused huge disruption to financial markets this week.

The group “r/Wallstreetbets” (aka WSB) is a longstanding subreddit channel where over 3.5 million Reddit users discuss highly speculative trading ideas and strategies. A decentralized Reddit forum called WallStreetBets is causing chaos on Wall Street.

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