Reddit Message Board Sends GameStop Stocks Soaring

A Reddit message board briefly sent Wall Street into a frenzy after GameStop stock started soaring. The video game and electronics retailer saw its shares spike more than 400% after members of the subreddit group called ‘WallStreetBets’ began aggressively touting their stock. This is far beyond what people think the stock is worth, especially as the company has been among those recently hit hard by the pandemic. GameStop has been one of the biggest recent targets of short selling which is when professional investors borrow shares to sell and then buy back later, then sell again at a profit. This usually indicates the company is going to fail. Other companies on the short selling list include AMC Theatres, Bed Bath & Beyond and Blockbuster. But thanks to talk on the Reddit board, all of these stocks have now begun to soar as they have become the sources of short squeezes. That is when borrowers sell a stock when it’s high, betting it’ll continue to fall. When that doesn’t happen and stock prices rise, short sellers are forced to cover their positions or buy more stock to minimize losses.