Over the past few days, but really over the past few weeks, GameStop’s stock price has been on a rocket ship ride. It all started when a bunch of folks on the Reddit board WallStreetBets observed that several large institutional investors had shorted GameStop’s stock. So over the past month or so, all of those private investors who follow that Reddit board started buying GME’s stock to drive its value up, thus driving huge possible losses for those institutional investors who bet against the retailer. From the CNBC article:
GameStop has rallied more than 680% in January alone as an army of retail investors marshaled against short sellers in online chat rooms, encouraging each other to pile on and keep pushing the stock higher. Short sellers have amassed a mark-to-market loss of more than $5 billion year to date in the stock, including a loss of $917 million on Monday and $1.6 billion on Friday, according to data from S3 Partners.
This activity was then sent into overdrive when Elon Musk tweeted about it.
Those are some big numbers pointing in the wrong direction. As noted when chatting with a friend today about this, someone is going to be holding the bag on this and it will not be pretty.