Hedge funds are getting crushed by the short squeeze – Goldman Sachs
|Hedge funds betting against GameStop and other stocks are facing losses due to the Reddit army, according to strategists at Goldman Sachs.
"The past 25 years have witnessed a number of sharp short squeezes in the US equity market, but none as extreme as has occurred recently," strategists wrote in a note published Monday, according to CNN.
A mob of traders on Reddit's WallStreetBets page recently sent out-of-favor GameStop, AMC, and other stocks skyrocketing, triggering a forced unwinding of shorts (bearish bets). That added fuel to the fire, leading to a staggering four-digit percentage rise in GameStock in the 17 days to Jan. 28.
The crowd buying and the resulting short-squeeze weighed over the broader market last week and attracted unwanted attention from regulators.
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