Legality of Gamestop Short Squeeze
[6] See, for example, Yun Li, Melvin Capital, Hedge Fund Targeted by Reddit Board, Closes out of GameStop Short Position (January 27, 2021), www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html; Maggie Fitzgerald, Citron Research, short saleswoman caught up in GameStop Squeeze, pivoting to the search for long opportunities (January 29, 2021), www.cnbc.com/2021/01/29/citron-research-short-seller-caught-up-in-gamestop-squeeze-pivoting-to-finding-long-opportunities.html. On January 27, r/wallstreetbets triggered a short pressure on AMC Theatres (ticker symbol: AMC), a company in a similar position to GameStop. [41] The value of AMC Networks (ticker symbol: AMCX) also increased significantly, which likely occurred because the name of the stock was similar to that of AMC. [42] Disruptions and restrictions restricting trading have been reported to several brokers such as Charles Schwab Corporation, its subsidiary TD Ameritrade and Robinhood. [43] [44] According to Bloomberg, the United States Then, of course, this would curb bare shorts and high-volume short selling. This would make the risk too great unless the company is really collapsing. Under the current system, if a short seller manages to short sell and dilute a stock to bankruptcy, he does not have to deliver the borrowed shares or pay taxes on that profit. Over the past week, the stock market has experienced a series of turbulent and extremely volatile events related to trading a small group of shares of publicly traded companies. With echoes of the 2010 flash crash and a rise in Hertz`s share price in mid-2020 as Hertz was mired in ongoing bankruptcy proceedings[1], many companies` stock prices have drifted away from their finances, valuations and other fundamental analysis.
