Gamestop, what is a short squeeze and what happens next?

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Lots of strange things have been going on in financial markets in the last years or so, most of them driven by the pandemic.

This took a strange turn recently on a small retailed in the US retailer called GameStop.

Until fairly recently Gamestop was a failing retailer, they have lost over $1bn in recent years and the global pandemic looked to have driven the final nail into their coffin.

But from essentially being worthless, their stock price has risen dramatically pushing their market cap to over $20bn at one point.

It’s an interesting lesson in market dynamics, investor hubris, social media, short selling and a whole range of topics that you don’t tend to see that often in the public eye.

I also think there are many lessons here in terms of how a market acts, what can trigger that and how something that is essentially worthless can suddenly get dramatically revalued, but still be worthless.

I’m pretty sure when it’s all over there are going to be some big losers.

#gamestop #gme #shortselling


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