In todays podcast our resident financial expert Adrian Lawrence talks about Reddit and how a subgroup on the popular social media platform have combined together to drive up the share price of a company called Gamestop.
There is an element of revenge investing at play as some members of the group are talking openly about the losses they suffered at the hands of hedge funds during the 2008 Financial crisis and not see this as an opportunity to get their own back. Hedge funds have been short selliing Gamestop shares, which means borrowing shares they don't have, selling them, then buying them back at a lower price so they can be returned. Of course not the share price has risen hugely from around a few dollars to over $300 those short sellers face huge losses.
It is a great story but not without a downsize the share prices of the stocks concerned are now very hight compared to the financial fundamentals of the companies concerned, which likely means small investors are going to end up loosing their money.
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