The thing about Melvin is they short traded the stock.
Short selling is a fairly simple concept—an investor borrows a stock, sells the stock, and then buys the stock back to return it to the lender. Short sellers are betting that the stock they sell will drop in price
For example, if an investor thinks that Tesla (TSLA) stock is overvalued at $625 per share, and is going to drop in price, the investor may "borrow" 10 shares of TSLA from their broker, who then sells it for the current market price of $625. If the stock goes down to $500, the investor could buy the 10 shares back at this price, return the shares to their broker, and net a profit of $1,250 ($6,250 - $5,000). However, if the TSLA price rises to $700, the investor would lose $750 ($6,250 - $7,000).
Now replace Tesla with Gamestop and $20 - $150
It's really gone. They've "borrowed" the stock at $20 from their broker just last week but now it's worth $150 meaning they have to pay that much for the stock itself. They've burnt through 6 billion and a 2.75 billion bailout, if the price stays like this on Friday, they simply won't have the capital to pay for the stocks and they'll have to declare bankruptcy.
I think. I'm just seeing how this plays out.
The thing about Melvin is they short traded the stock.
Short selling is a fairly simple concept—an investor borrows a stock, sells the stock, and then buys the stock back to return it to the lender. Short sellers are betting that the stock they sell will drop in price For example, if an investor thinks that Tesla (TSLA) stock is overvalued at $625 per share, and is going to drop in price, the investor may "borrow" 10 shares of TSLA from their broker, who then sells it for the current market price of $625. If the stock goes down to $500, the investor could buy the 10 shares back at this price, return the shares to their broker, and net a profit of $1,250 ($6,250 - $5,000). However, if the TSLA price rises to $700, the investor would lose $750 ($6,250 - $7,000). Now replace Tesla with Gamestop and $20 - $150 It's really gone. They've "borrowed" the stock at $20 from their broker just last week but now it's worth $150 meaning they have to pay that much for the stock itself. They've burnt through 6 billion and a 2.75 billion bailout, if the price stays like this on Friday, they simply won't have the capital to pay for the stocks and they'll have to declare bankruptcy.
I think. I'm just seeing how this plays out.
The thing about Melvin is they short traded the stock.
Short selling is a fairly simple concept—an investor borrows a stock, sells the stock, and then buys the stock back to return it to the lender. Short sellers are betting that the stock they sell will drop in price
For example, if an investor thinks that Tesla (TSLA) stock is overvalued at $625 per share, and is going to drop in price, the investor may "borrow" 10 shares of TSLA from their broker, who then sells it for the current market price of $625. If the stock goes down to $500, the investor could buy the 10 shares back at this price, return the shares to their broker, and net a profit of $1,250 ($6,250 - $5,000). However, if the TSLA price rises to $700, the investor would lose $750 ($6,250 - $7,000).
Now replace Tesla with Gamestop and $20 - $150
It's really gone. They've "borrowed" the stock at $20 from their broker just last week but now it's worth $150 meaning they have to pay that much for the stock itself. They've burnt through 6 billion and a 2.75 billion bailout, if the price stays like this on Friday, they simply won't have the capital to pay for the stocks and they'll have to declare bankruptcy.