I have been a longtime lurker, since 2015 or 2016. This was not what I expected to be my first post, but regarding this topic, I feel I need answers. As most of you know, Gamestop is a heavily shorted stock. [removed-needs link]In theory, a short squeeze will be triggered at some point. That's where a stock soars to astronomical heights. Squeezes have happened a few times in history. The most notable one was when Volkswagen in 2008 briefly became the most valuable company in the world before the stock dropped.
Anyway, I don't want to get into too much technicals, but there is a lot of weird and shady stuff going on with Gamestop. For instance, each day, trade volume has dropped since the squeeze started. It's at 20% of what it was last Monday which means most people that own shares aren't selling. However, it seems that there are coordinated and most likely illegal short ladder attacks to bring the stock down. There have also been a lot of other shenanigan's going on with hedge funds and restricting the ability of retail traders (every day people) from buying shares. It also looks like there is the possibility of people having illegally creating counterfeit shares of Gamestop (note: only big brokers and hedge funds really have the ability to do that sort of thing - [unconfirmed]. Also, the SEC chairwoman is Janet Yellen who was paid [unconfirmed - please provide reliable source] $800K by Citadel a hedge fund with a major short stake in Gamestop. When you short sell, you borrow the stock and are essentially saying you think the stock will go down. In the case of Gamestop, the price was manipulated by selling more short shares of the stock than exist [unconfirmed]. This happened by allowing short sellers to borrow shares from other short sellers. There is also the possibility of counterfeit shares being created to allow this to happen.
Anyway, if Gamestop does go through a squeeze, there is a good chance these hedge funds go bankrupt. They would also have to liquidate their positions causing them to sell off their holdings thus causing the stocks they hold to go down in price (and their short positions to up in price).
Anyway, I was wondering what anyone sees. Will the short squeeze happen or is there too much corruption involved? What is going on here? Will Gamestop cause a market crash? In the 9/30 reading, 3 people saw that the market would crash, and I noted that Congress had no idea what to do about the economy. What else would cause Congress to feel this way other than a crash. Covid isn't anything new, so I can't really see what else would happen.
Anyway, if anyone has any insights, I would like to hear. Thanks.