The goofballs on Wall St. have done it again.
WordSpeed, an American chip manufacturer, has been shorted so much that MORE than the entire float has been sold before being bought (i.e. sold short).
For those that remember, in 2021 the major financial institutions made the exact same mistake: they sold more shares than existed. When regular people realized that this implies fraudulent activities, such as naked short selling, where a market actor sells shares without borrowing them first, and consequently were at the mercy of actual shareholders being willing to trade the stock below these institutions' entries, they simply decided to stop selling any shares back to the crooks in suits. Instead, they started hoarding these shares, because they knew the short sellers would have to close their positions eventually or risk getting margin called.
This resulted in an explosive move to the upside, with GameStop shares increasing by more than 11000% within a period of just six months. It is still trading more than 350% above the price before the explosive move in question.
I wonder what might happen if investors in this particular American chip manufacturer did the same now... Would one see a similar situation play out, or have the bad actors found ways to avoid repeating their old mistakes (well, obviously, they've done the same old unethical thing, but can they now avoid a sneeze?)
This is, of course, not financial advice, since I am just some random pleb with no education in financing. You should probably not make financial decisions based on what random people on the internet post. That includes me.
