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Can GameStop type forum in India influence retail investors’ behaviour?

Regulators in India should take note of the GameStop saga and keep a strict vigil on social media to avoid something like this happening in Indian markets.

January 29, 2021 / 08:49 AM IST
Source: Reuters

Source: Reuters

Atish Matlawala

What has happened in GameStop is something really amazing and has never happened before. Reddit’s WallStreetBets forum which is a group of 3 million day traders gathered and conspired to take long positions in GameSpot which made hedge funds to square off their short positions.

To put things in perspective, short-sellers in GameStop lost $ 5 billion in mark-to-market losses in the month of January, and on Tuesday alone they made a loss of $867 million as the stock rallied 95 percent in one single session.

Still, data from the exchanges suggest that older shorts are covering their position due to large mark-to-market losses, new short sellers are looking to initiate new short positions.