What the heck is happening with GameStop?

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

The best breakdown is not succinct, but comes through the mailing list / column Money Stuff by Matt Levine. He's done three days of coverage of the various aspects of this as it's progressed.

It's not a short read, but is very easy to follow. I highly suggest subscribing!

[1] First day: https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...

[2] Second day: https://www.bloomberg.com/opinion/articles/2021-01-26/will-w...

[3] Today: https://www.bloomberg.com/opinion/articles/2021-01-27/reddit...

It started out as a fun joke, then people started making money, then from my view it got sort of co-opted into an occupy type thing.

When you buy before you sell, it's called a 'long' trade. You expect the stock to rise in value. Normal trade.

When you sell before you buy, it's called 'short' trade. You expect the stock to fall in value.

Example:

I shorted GME at $25 (sold), expecting it would fall to $12, where I could buy it back.

Reality:

/r/Wallstreebets and others decided to keep buying to make the 'shorts' buy (i.e. cover) also, creating a buying frenzy and an insane rally.

This twitter thread has a good explanation of what's happening

https://twitter.com/MrBrownEyes2020/status/13545170672407715...

Here's the best explanation I've found https://www.youtube.com/watch?v=4EUbJcGoYQ4

From what I understand, investors shorted 150% of stocks, so when people start buying the shares and the share prices, the investors are forced to sell their shorts, thus increasing the price and the whole things snowballs

Hedge funds shorted more than 100% of listed stock, made themselves vulnerable to a short squeeze.

I don't know, but this is not it:

https://www.cnn.com/2021/01/27/politics/gamestop-stock-surge...

ELI5 version here:

https://wallstreetplayboys.com/amc-gamestop-and-nokia-why-it...

Essentially there was a hedge fund who was heavily short in GameStop stock to the tunes of many millions. Once the subreddit community of WallStreetBets started applying buy pressure it made the shorts either add more/cover; or have to sell and when they do it adds buy pressure to the book. Led to a big gamma squeeze and this fund got caught off guard with poor risk management and the stock surged so much letting the small joe win for once in a game of smoke screen tactics by larger funds

i am fairly clueless about the stock market, and would love an explanation for the following: there seems to be no discussion about the company’s fundamentals, it seems to be all about bankrupting hedge funds. That makes no sense to me. Am I being naive here?

And in the final analysis, it seems to me like the bigger driver of GME’s stock was not retail redditors, but companies like Vanguard etc. So, this isnt even a David Goliath situation. Some billionaires lost their shirt, and other billionaires made a shit load of money. This is like David standing up to Goliath, until Davids dad comes in and gives Goliath a proper ass whooping. Is this what happened?

Pump and dump that's what's happening.

Pump and dump https://www.youtube.com/watch?v=KjLGu7X4a6U