As of Thursday, the stock had risen to hundreds of dollars, whereas it was circling perhaps one-tenth of the value last week. This came about by some finance-savvy Redditors that went up against Melvin Capitol and Citron Research who intended to “short sell,” according to Dr. Arnold.
“This is where you borrow the stock and then you hope to replace it later at a lower price, so this way you’re able to earn money as the stock price goes down,” he said, simplifying it even more. “It’s kind of like if a friend lent you their car and you go and sell it, and when your friend wants it back, and you decide to rebuy the car, hopefully at a lower price.”
Arnold mentions that while this sort of trading does seem like a fad, it may have started something bigger with smaller, individual investors, adding that “it’s GameStop right now, but it wouldn’t surprise me if six months from now it’s a different stock.”
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