

An investor might borrow 100 shares and sell them for $4 apiece, or $400. Once it drops, the investor can then buy the stock back and return it to the original seller at a profit.įor further clarity, let’s go back to a year ago when GameStop stock was selling for $4 a share. That investor borrows shares of the stock, typically through a broker, then sells the stock and waits for the price to drop. An investor pinpoints a poor-performing stock with the assumption the price is going to drop. Why? Because they can sell those stocks and make a profit. With short selling, investors see a struggling stock like GameStop and borrow shares in it. Short selling is complicated, even when explained in the most elementary terms. How short selling worksĬonsumers were a little confused about what happened–for good reason. Those investors were engaging in something called short selling, and the WallStreetBets community decided to do something about it. Despite the fact that the company was far from thriving, hedge fund investors seem to be especially interested in it. That group took notice of a trend when it came to GameStop. Since 2012, a group of investors in a community called WallStreetBets have monitored the stock market. A week after the announcement, shares in GameStop doubled. The three newcomers are working to move GameStop to a digital model, an area in which Chewy has thrived. GameStop added three new executives to its board–all former Chewy executives.

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