ONLINE, AND IT'S SOMETHING THATMONEY EXPERTS SAY THEY'VE NEVERSEEN BEFORE -- ALARGE GROUP OF INEXPERIENCEDINVESTORS WHO DISCUSSED THEIRPLANS ON THE SOCIAL MEDIAPLATFORM REDDIT, HAVESHAKEN UP THE STOCK MARKET INTHE BIG WAY23ABC'S AUSTIN WESTFALL JOINS USLIVE IN CENTRALBAKERSFIELD FROM THE KERN COUNTYSUPERVISORSBUILDING WITH DETAILS ON HOWTHEY DID IT, AND WHAT LOCALEXPERTS SAY ABOUT INVESTINGWISELY DURING THE PANDEMIC.JESS, THIS STORY HAS TO DO WITHGAMESTOP STOCK.
EARLIERTHIS MONTH THE COMPANY WASTRADING AT $18 BUT JUMPED TO$350 ON WEDNESDAY, AND IT'SBECAUSE A GROUP OFSTRANGERS ON REDDIT BANDEDTOGETHER TO GIVE INVESTMENTPROS A RUN FOR THEIR MONEY"IF THERE'S ANYTHING I LIKEABOUT THE STORY, IT'S THAT,IT'S THAT THE LITTLE GUY ISFINALLY PULLING ONE OVER ON THEBIG GUY.TO UNDERSTAND WHAT'S HAPPENINGWITH THE STOCKMARKET RIGHT NOW, LET'S STARTWITH THE TERM SHORTING.
IT'SHOW HEDGE FUNDS AND OTHERPROFESSIONAL TRADERS PROFITFROM A COMPANY'S STOCK NOTRISING...BUT FALLING.
A GROUPOF USERS ON THE WEBSITE REDDITDECIDED TO USE THIS TO THEIRADVANTAGE WHEN THEY REALISEDTHAT SOME HEDGE FUNDS WEREBETTING ON GAMESTOP STOCKFALLIN"SO ESSENTIALLY WHAT ISHAPPENING IS THEY'RE PUTTING ALOT OF MONEY INTO THESECOMPANIES, GAMESTOP IS ANEXAMPLE OF THIS.
IT'S DRIVINGTHE PRICE OF GAMESTOP UP,THE SHORT SELLERS, THE HEDGEFUNDS, ARE LOSINGBILLIONS OF DOLLARS."DAVE ANDERSON OF THE MONEYWISEGUYS SAYS THIS ISCALLED SHORT SQUEEZING, BUT HE'SNEVER SEEN A SHORT SQUEEZETHIS SUCCESSFUL.
THE INTERNETUSERS IN THIS SITUATION ENDEDUP PROFITING.
IT WORKED FOR SOMEPEOPLE THIS TIME...BUT IS"SHORT SQUEEZING" A SMART WAY TOINVEST"IT'S DEFINITELY NOT A SAFEMETHOD OF INVESTING.
I MEANANYTIME YOU'RE SEEING SOMETHINGGOING UP 8,000 PERCENT, ANDYOU'RE HEARING THESE STORIES OF"YEAH ISTARTED WITH A THOUSAND DOLLARSAND NOW I HAVE AMILLION DOLLARS." THAT TELLS YOUTHAT IT'S EXTREMELYRISKY."ANDERSON SAYS WHAT GOES UP MUSTCOME DOWN, ANDGAMESTOP STOCK IS CERTAINLYHIGHER THAN IT OTHERWISEWOULD'VE BEEN BEFORE THE SHORTSQUEEZE.
BUT SOME THINGS HAVECHANGED RECENTLY, WITH STOCKTRADING AND INVESTINGAPP ROBINHOOD RESTRICTINGTRANSACTIONS TOWARD SEVERALCOMPANIES, INCLUDING GAMESTOPBECAUSE OFWHAT THEY CALL "RECENTVOLATILITY.""IF YOU'RE JUST COMING AROUNDNOW AND HEARING THISNEWS AND GOING "OH I'M GONNA GOIN AND BUY GAMESTOPBECAUSE IT'S GOING UP." YOUMIGHT BE LEFT WITH NOTHING."ANDERSON DOES HAVE SOME TIPS FORSMART INVESTING.
HESAYS YOU'LL BE OK AS LONG AS YOUSTAY DIVERSIFIED INYOUR INVESTMENTS...NO T PUT ITALL INTO A COMPANY LIKEGAMESTOP... AND MAKE TIME TO LETYOUR INVESTMENTSMATURE.
IN BAKERSFIELD AUSTINWESTFALL 23ABCCONNECTING YOU.COMING
It’s created a ton of talk online, and it’s something that money experts say they’ve never seen before -- a large group of..