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Wall Street is “losing their minds” after a group of small investors with trading accounts ranging from $ 500 to $ 2,500 band together to “take out billionaires,” Fox Business host Charles Payne told Wednesday. “Tucker Carlson Tonight”.
‘Making Money’ host addressed GameStop’s dramatic surge in share price after a group of Reddit users teamed up to buy ailing retailer’s call options – pushing stock prices of society to unprecedented levels and hurting short sellers in the market.
“These hedge funds that sell these stocks, they don’t own the stocks, so they borrow them,” Payne explained. “Imagine borrowing a stock that trades at $ 10, then driving down the price of the stock and buying it back for a dollar. You make the difference, nine dollars.”
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Short sellers, Payne explained, are investors who speculate that the price of a stock or security will drop. The strategy is to borrow stocks in order to sell them in the hope of buying them back at a lower price in the future.
“They are allowed to sell that many shares,” he said. “Do you know how much stock that was on GameStop? Let’s just say 100% of the stocks that came out, they shorted 140% of the stocks, so they borrowed the same stock over and over, the same stocks and sold it in the market.
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“Their job, their mission was to bring GameStop to zero,” he added. “No one has said a word about any financial network, especially CNBC, which always lets short films pass …”
Small investors who had had enough revolted against Wall Street on Wednesday when they decided to collectively raise the share price.
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“It’s called a short squeeze,” Payne said, “and it works.
“Wall Street is losing its sanity and now Wall Street wants to change the rules of the game because a group of people with accounts ranging from $ 500 to $ 2,500 are destroying billionaires.”
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