its a short squeeze not a bubble. Hedge funds getting margin call'd by their brokers and forced to liquidate their positions due to insane losses results in a massive spike.
A short is literally just the reverse of buying shares, instead of buying you are selling shares that you do not have (thus 'short' X amount of shares). it works like this:
- Investor borrows X amount of shares from brokerage firm
- Investor then sells those shares for money hoping to buy it back at a cheaper price to profit the difference.
Now with gamestop, what happens when not only does the stock go up, but also there are also literally no shares to buy back? You get whats known as an infinity squeeze, for as long as shareholders do not sell their shares, the stock can infinitely rise until a sell-off occurs and all the shorts (who now have been margin called, which means forced to exit their position), have to cut their losses and RETURN the shares they loaned by BUYING them back. Now i do agree that in the long term gamestop is realistically dying if they cant penetrate some kind of market, their upcoming 'build-a-pc' kiosks are not going to work when everyone is ordering off fucking newegg, cyberpower or amazon. The age of brick and mortar retail storefronts is over, gamestop is trying to transition into e-commerce but they cant compete with pc building, they cant compete with steam or anything, so whats in store for them long term? i have no idea.
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