What happened during the Game Stop stock craze in 2020?
In: Economics
A very talented and highly trained security analyst noticed that the stock was heavily shorted. This means that traders had borrowed the stock and sold it and would have to buy it later to cover the borrow. He did the math and figured out that if the stock went up and the traders were forced to cover, the price would zoom. He talked about this on Reddit and YouTube. Some people bought the stock, it did indeed go up a and a lot more people bought it, which made it go up more and the price took off.
Since then the price has dropped a lot and the company may or may not survive. Those that bought at the low price have made money. Those that bought near the top have lost money.
Latest Answers