Comment Re:This is just great (Score 1) 82
Nobody on WSB thinks they can drive the share price in perpetuity. What they have figured out is that small investors, banded together, can manipulate the price of heavily shorted stocks using options. That can push institutional stock shorters into a scenario where they end up driving up the price of the stock even more when they have to cover their short positions on stocks with limited availability for trading (losing millions in the process). Things eventually even out and some portion of the WSB crowd ends up losing what is (to them) very significant amounts of money. Until then, however, lots of small investors make several times their initial investment while shoving huge losses onto the institutional investors. Tim Collins, from thestreet.com put it well: “A large group of retail traders have realized if they work together, using market tools such as out-of-the-money call options or low-float stocks, they can overpower any institution or short seller in the world, outside of the Fed, of course.”
In short, it's a giant FU to the institutional investors who have destroyed the market for the average investor via HFT and the arguably immoral use of options trading - i.e. shorting a company then doing everything you can to hasten or bring about the failure of that company. Shorts used to be a great way for institutional investors to hedge other investments in order to maintain reasonable target returns. As soon as some of those investors started using them to destroy companies while making huge profits I ceased caring if those investors were to lose it all.
WSB is way too volatile for me to risk my money on such an operation, but I do enjoy watching regular people make $50k on a $10k investment while those who turned the market into trading baseball cards lose tens of millions.