Reuters is reporting massive losses to the hedge funds that sold GameStop (GME), but were thwarted by Reddit retailers who decided to put shit in their punch bowl by raising the price, leaving short sellers holding the bag.
Short sellers are sitting on estimated losses of $ 70.87 billion from their short positions in American companies so far this year, data from financial data analytics firm Ortex showed on Thursday.
Heavy losses occur when highly sold GameStop shares jumped more than 1,000% last week without a clear business reason, forcing short sellers to repurchase shares to cover potential losses – defined as short squeeze – while retail investors so they came together to benefit from the increase.
Heavy losses in hedge funds are exactly what many retailers say they want, seeing this as revenge for the 2008 bailouts after the housing crisis that left many Americans homeless while Wall Street prospered, fat with government alms.
While many have criticized retail traders for using the market as a tool of revenge, it appears to be working so far. To update yourself on the backstory, read the following: