American retail investors hanging Wall Street short-selling institutions, which has attracted global attention in recent days.
The main battlefield this time is the game post (GME) stock, which is a game retailer whose business has deteriorated to the edge of delisting under the impact of online games.
Therefore, it was targeted by Wall Street, and a large number of institutions shorted, and the net shorts once reached 140%. A group of American retail investors were very dissatisfied with the arrogance of Wall Street and encouraged people to buy stocks and options at the game station on the American forum reddit to defeat Wall Street.
The miracle really happened. Last week, the stock price of the game station soared fourfold, first standing at $100, then rising to 300 dollars, with a maximum of 483 dollars. On January 29, it closed $327.5, and soared 16 times in January.
Wall Street short-selling institutions were blown up, and the hedge fund Melvin Capital flattened its short position and suffered huge losses, and had to ask two institutions for $2.75 billion for blood transfusion.
Short crocodile, which frequently makes air concept stocks, announced that it would stop short research.
No matter what the outcome of this epic “cooker” battle Wall Street is, Wall Street has indeed been challenged.
In the future, I’m afraid we will have to think twice about shorting as you want.
Short-selling mechanism was originally a system to improve the stock market, and in some aspects it also helped to find problems.
However, Wall Street has put this mechanism to the extreme, even become a “stick” in an attempt to obtain huge profits.
It’s inconceivable that the game post station has reached 140% in short.
Several major financial turbulences in history have been related to short-selling by the Americans, typically the Asian financial crisis in 1997, which was the result of the shorting of foreign exchange and stock markets in many countries and stock markets of Southeast Asia by Soros and made a lot of money.
However, short-selling is not invincible. In the Hong Kong market of China, Soros’s short-selling encounters Waterloo, which suffered heavy losses. From then on, it will never be carried out in large-scale short-selling.
Last April, the U.S. crude oil futures market showed negative oil prices for the first time in history, which was also the result of a shorting of giants. This thing is very strange. Only on April 20, 2020, there is a very exaggerated negative oil price of $37.6 per barrel.
Neither in the spot market nor on the delivery date of the 21st, there has been no negative oil price. This negative oil price does not truly reflect the market price, and it is completely a short-selling agency’s excellent use of funds.
Special circumstances such as the small transaction volume on the day before delivery are suppressed in order to obtain huge returns.
Obviously, many short-selling behaviors on Wall Street are not rational, and it is indeed time for reflection.