It’s all about GameStop.
The word is out.
It’s only been a few days, but by now the story is already taking on legendary proportions.
While being cheered on by Elon Musk, a big group of young retail traders gathered on the “wallstreetbets” Reddit forum.
There they shared their enthusiasm to drive up the stock price of the nearly-defunct video game retailer GameStop (NYSE-GME).
A Short Squeeze On GameStop
The net result was that they began putting a major squeeze on big short-selling hedge funds like Melvin Capital. In pacing major bets that the price of GameStop would keep going lower, Melvin Capital literally exposed itself to an infinite amount of risk.
That firm was nearly bankrupted as skyrocketing prices forced it to cover its short positions. As the GameStop enthusiasts kept bidding up the price, the only way out was to take a huge loss.
And that’s exactly what happened.
The short-covering brought Melvin Capital a loss of roughly $3 billion. But the damage didn’t stop there.
Along the way, the trendy fractional-share online brokerage Robinhood also took a beating, as it hurried to raise $1.5 billion overnight in an effort to stay afloat.
The Reddit crowd rejoiced as the price of GameStop went higher and higher. The little guys found new strength in numbers.
The astrology surrounding the trading action shows that GME was particularly ripe for its role in the mayhem.
Transiting Jupiter (A) conjoined the GameStop First-Trade Neptune in a classic signature of wild speculation.
At the same time transiting Uranus (B), still at the position of its recent station, formed a powerful “finger of fate” yod pattern with First-Trade Cupido and Zeus [an irresistibly forceful community] and an opposition to First-Trade Poseidon [explosive new ideas suddenly coming to light].
Even if they weren’t aware of the astrological background, the Reddit crowd certainly had great timing!