An analysis of the losses suffered by hedge funds during the GameStop crusade launched by retail investors indicates that the ‘short press’ short sellers have already cost up to $ 19 billion.
Data provider Ortex said according to the analysis they provided to Business Insider, those targeted by the ‘short press’ operation by members of a Reddit investment group were on the verge of losing as much as $ 19 billion.
And that’s only until the end of Friday.
The celebrated action by retail investors is seen by some as a tale of David and Goliath, but others have criticized it as a manipulation of the market.
The scheme was developed after the Reddit group took note of hedge funds making too much use of their commitment to GameStop, a video game retailer. By urging their members to buy the shares, the retail investors of Reddit increased the price and forced the bettors against GameStop into a precarious and expensive position.
The short squeeze operation raised the price of GameStock shares in August from about $ 5 per share to $ 325 per share by the end of Friday’s stock market session.
The 6,400% increase in the value of the stock forced one hedge fund to obtain emergency financing to pay for their losses.
Ortex called the GameStop battle Thursday in a blog post the ‘first major battlefield in an emerging war between individual investors and Wall Street institutions’.
They estimate that other short sellers lost more than $ 70 billion on US companies this year alone.
“Regardless of the final outcome, the GameStop saga points to an increasing democratization of the markets, with fairer access and a more equal playing field. The information advantage that maintains the status for so long is crumbling, and it has far-reaching consequences. for investment, markets and the industry itself, ”they explained.
Critics of the Reddit rebellion have noted that many small investors will almost certainly lose a lot of money if and when the GameStop share of the artificially high price falls to earth.
Here’s more about the GameStop uprising:
GameStop share frenzy starts again
www.youtube.com