Yet it plays an important role in efficient capital markets by facilitating secondary market trading of securities and positively impacting corporate governance and the economy. This strategy tends to receive negative attention in the media under concerns that it is purely speculative and potentially destabilizing for markets. Short selling is the investment strategy that speculates on the decline in a stock or other security’s price and can be used to hedge against the downside risk of a long position in the same security or a related one. To understand why this caused such an uproar, it is important to understand short selling. The bullish run of GME stock was followed shortly after by a similar short squeeze on AMC Theatres (AMC), which benefited from the same driving factors as GameStop, with share prices spiking as much as 52%. This rally, due to the nostalgic love these investors had for the company and to battle against Wall Street, led to a 1,600% increase in the GME stock price and has been marked as one of the most significant bull rushes in stock market history. From here, thousands of people rallied together to buy GME shares to drive up the price and cause the short positions to incur large losses. This is where word of the large shorts being placed against GME came to the mainstage. This forum allows career investors and the average person alike to come together to discuss hot topics in the trading market. (GME) every day average Joe’s acted as retail investors and pushed back against the shorts placed against GME by the described “1% of Wall Street.” This event was fueled and backed by the popular Reddit forum, WallStreetBets. These are situations where investors coordinate purchases and drive up the price of certain stocks in order to force short sellers to exit their positions at a loss1. In early 2021, Wall Street began seeing high profile short squeezes.
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