The big short explained reddit movie#
It appears something similar could be on the horizon for AMC movie theaters, which has been struggling during the pandemic and has been heavily shorted.Įven veteran traders have trouble dismissing a 900,000-user Reddit forum called r/wallstreetbets, or r/WSB for short, whose tips and tactics have shown an uncanny ability to push prices, at least for the short term /HgGji95qy6 - Businessweek FebruNever tell them the odds
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The Dow Jones is down overall, possibly as a result of this, with investors having to move around money in order to cover the short bets they had on GameStop. More than 5,000 firms had losses from shorts as of Wednesday. According to Reuters, losses from short positions have topped $70 billion. Other hedge funds could find themselves in similar trouble soon. However, previous speculations that the firm would file for bankruptcy are apparently not true. In Melvin Capital's case, it has sold out of GameStop completely as of January 27. In a process known as a "short squeeze," short sellers were forced to buy back stock, bailing out on their gamble before prices rose too much. In January this year, Cohen joined the board of directors, which led to renewed faith in the stock from analysts and investors-and a big problem for short sellers. It's been a strategy for years and is even the subject of the book and film The Big Short, as it was used during the subprime mortgage crisis.
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In the letter he noted that GameStop's stock was one of the most shorted around, referring to short selling, a practice where investors can sell borrowed stock that they think is going to decrease in value, then buy back at a lower price, thus keeping the difference as profit. After becoming the company's largest private investor, Cohen tried to discuss changes to the company with management and later ended up sending a letter to the board detailing how the company could be turned around. GameStop's stock sat well below the $10 mark for most of 2020 until August, when Chewy founder Ryan Cohen bought a large number of shares, pushing the price up. Now Playing: 8 Most Anticipated Games Of 2021 How it started By clicking 'enter', you agree to GameSpot's