Customers will be leaving a GameStop store in Alhambra, California on January 27, 2021.
Frederic J. Brown | AFP | Getty Images
Wall Street was rocked last week by amateur traders pumping money into unfavorable stocks in an attack on short positions holding large hedge funds.
Retailer GameStop and cinema chain AMC are now up more than 1,744% and 838% year-on-year, after retail investors organized via WallStreetBets via Reddit to raise their prices. higher and pressure institutional short sellers. Short selling is when investors borrow shares at a certain price and expect the market value to fall below the level when it is time to pay for the shares.
Hedge funds have already lost serious money and have been forced to close short positions as online activists continue to seek new targets, despite warnings that the trend towards David against Goliath could end in tears for some retailers. Redditors on Thursday filed a lawsuit in shares of Nokia and others.
Now, analysts have told CNBC their strategies for keeping investors safe are the battle between retail investors and institutional money.