Macroscien said..
Whole story only pumped millions of dollars from small investors , not even aware how share market works.
Those money will be then strategically and systematically removed by hedge funds .Because fundamentals behind companies are not great at all, prices must corrected.
Whole Ponzi scheme was funded this time by unaware internet public , but they can not win against AI behind hedge funds investors.
Only few mums and dads get richer at first early stage, then most are going loose everything , as usual. But here as with negative oil prices, we witness another historical discovery, Companies may have negative value too ! So your risk is no longer limited to your amount invested , but can loose more. Example. You bought 1 share worth $100 .After time whole company is worth -10 bln dollars ,
So your corresponding share is now worth negative $100 /
-$100!!!
So far we assumed that listed company that have some cash , assets , profit and did nothing wrong can not suddenly loose all the money.
Ok , may loose 100% max.
But now company may be worth negative because how speculative market works.
Did you read this on what actually has happened or is happening? Your post suggests not.
The people on Reddit seemed to want to take revenge on the hedge funds that are selling short and effectively destroying companies (whether they are going to fold or not is irrelevant as you would never know unless there is no interference) due to their short selling. I.e. they pick on a company and short sell which sends a message to the market that they think its going down in value/something is wrong, so investors also dump the stock. The revenge is by buying the same share, pumping up the price, so that those that are short on it will need to pay interest or buy the shares to then cover their position. I.e. they pay interest or eat the loss and buy at the higher price. If they hang on until the reddit people give in, they still pay interest, and if the reddit share holders are spread out enough they may not care enough to sell, which may not bring the price down, so the fund has to eat the loss at some point.
AI has nothing to do with it. In fact if you read the reddit feeds it sounds like some of these investors are listing their shares to sell at crazy prices in the hope that some of these funds have a buy order and didn't specify a maximum price.
The reddit crowd, if they have no need to sell and don't care about the value of the share other than to torture these funds will make the funds lose a bundle to cover their position.
There was some article I read where the author was trying to make out that these hedge funds short selling were actually heroes... obvious BS and the author was trying to defend them for a practice that can bring companies to their knees for no reason other than some fund decides to as they can make money.