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It would be market manipulation if they were deliberately setting out to raise the price by spreading false information, using insider knowledge, etc. As it is, all that’s happening is a bunch of redditors are telling each other to buy GameStop shares because they’re a good investment. The price is going up because WSB folks are willing to buy at prices much higher than the ‘real’ long-term value of a GameStop share.
Wait so is the timeframe on a short always one week? Also, is the short, as a “financial instrument”, supposed to facilitate any real, useful function, or is it a construct used exclusively to gamble with?
In practice, the short seller will borrow the stock in exchange for some small amount of interest, sell that stock, and as long as they keep paying the interest they might take a long time to buy the stock back and return it. The lender can usually request the stock back at short notice, however.
Shorts are part of a complicated web of financial instruments that are supposed to a) stabilise stock prices, in the sense that they keep stock prices close to the ‘real’ value of the stock, and b) allow traders with better market knowledge to make money at the expense of traders with worse market knowledge. They’re ‘useful’ in that sense.
