I keep reading that the hedge fund managers buy stocks that they are predicting will drop, then buy them back at a lower price when they do.
That's a lie.
The hedge fund managers band together and cause a stock to drop by short selling it. They kill its price then buy it back at a cheaper price and pocket the difference.
They don't predict schitt. They cause the price to drop.
Obviously hedge fund managers don't BUY stocks they are predicting will drop.
I doubt that short sales have enough volume to cause a stock to drop; short sellers expect actual sellers to drive the stock down, whereupon the short sellers buy the stock to cover their position, pocketing a tidy little profit in the process. The short sellers primarily influence the direction the stock moves if other investors see a short position in the stock and act on that information. This time their gambit didn't work because actual buyers overwhelmed actual sellers and drove the price up, thus squeezing the short sellers. Hooray for the little guys!
I know little about the market. Most of that, I learned in the last ten days.
But I would suspect the reason the hedge fund managers targeted GME is that it is a very small corporation and the stock values are easily manipulated.
Exactly why the managers got bit in the butt so badly.
People who choose to brew up their own storms bitch loudest about the rain.
