The market is a thrilling arena for investors in the internet age. Due to the previously unimaginable connectivity afforded to the public by the internet and social media, we’ve seen coordinated efforts by online investors who’ve used message boards to engineer short squeezes against hedge funds, like with the highly-publicized story surrounding GameStop.
A short squeeze occurs when investors betting on a stock's decline are forced to buy shares to cover their positions, driving the price up further. This phenomenon was vividly demonstrated with GameStop, causing substantial losses for hedge funds and prompting a regulatory response.
In this week’s throwback episode, we check back on the early days of the ongoing GameStop/Reddit saga to see where it all began.
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Topics Discussed:
- GameStop
- Robinhood
- Shorting stocks
- SEC regulation
Resources Discussed:
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