Wall Street ന് കിട്ടിയ പണി | The GameStop Short Squeeze Controversy Explained in Malayalam - YouTube

Is the stock market in the world monopolized by anyone?

There is a group of people on Wall Street in the United States who believe that this is so

We call them the Wall Street giants

But what we can see on Game Stop issue is that some people are proving that the stock market is not your monopoly but ours too.

In this video I am going to explain two things to you

First, the problem with these Wall Street giants

Second, what happens as part of this game stop issue

You watch this video from beginning to end to understand these things

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We have heard about our share market and know more

During this lockdown, many people have invested in the stock market and made a profit.

We can see two types of investors in the stock market

one - retail investors

two - institutional investors

Retail investors are ordinary people like me or you

To buy or sell shares directly for our needs

So what's the problem with that?

Because the funds in our hands are a very limited small amount

The number of shares we can buy or sell at a time is very small

We will buy or sell 100 shares and 1000 shares

Doing so will not make a big impact on the market

The share price of that company is not going to go up or down just because we bought or sold a few shares

This is called retail investment

Next are people who call themselves Institutional Investors or Hedge Funds

Let's see what they do

They take money from people and invest or trade for them

This is exactly what mutual funds in our country do

Once asked what makes them special

The amount of funds available in their hands is a huge amount

Because a lot of people are spending funds

Because of the huge amount of money spent on each investment

They can buy and sell a lot of shares

That means they can buy and sell millions of shares in a single transaction.

So what is the advantage for them?

The share price can fluctuate as part of an operation they perform

Because they are buying and selling millions of shares

It is their ability to create this fluctuation that makes them arrogant

Once we go to Wall Street in the US we can see a lot of Institutional Investors like this

Because they carry out operations worth lakhs or crores

Because it buys and sells millions of shares like this

Power increases here over time and then it becomes arrogance

The US government is coming forward to save them if anything happens to them

Because they are spending the money of the American people

If there is any problem with this money

This is because it is becoming a problem for the American people themselves

The government is with us. We have a lot of money in our hands. Their pride is that we can show anything in the market.

Because of this, not only in the eyes of the United States but also in the world economy, we can see that a lot of problems from time to time

The closest example is the 2008 global recession

The global recession of 2008 started on Wall Street in the United States

They aim to make money without any ethics

The US stock market crash is the result of a number of initiatives

Then it spreads all over the world

At that time you may have seen your relatives or friends coming from the Gulf where they lost their jobs

It all started with the Wall Street Investors' Games in the United States

These are the people who have made a lot of negative incidents like this in the world

This is what you need to know about Wall Street

Now let us see what is the issue for Game Stop

GameStop is an offline retail store

GameStop is a store for the sale of gaming consoles and PlayStation CDs.

Their sales have been declining over time and their share price

Because no one goes to the shops now, everyone buys and plays games online

With that came the covid lockdown

Then the company suffered a lot of losses and the share price went down again

The Wall Street Giants took advantage of this opportunity

Shorting is the activity that makes a profit when a company goes down

Let me explain to you what shorting is through a small example

Assuming that the price per share is going down

Short is the act of selling the shares first and then buying them later

Let us look at an example

Suppose the price per share of a company is Rs 100

We expect the share price to fall to Rs 10 per share in a week

What do we do then

First, we borrow shares from someone

Suppose I am borrowing 100 shares from someone

The borrower has to pay a small fee

The 100 shares I borrowed are for immediate sale

I get Rs 10,000 in that sale

And then, as I thought, the price per share goes down to Rs 10

At that time I will buy 100 shares from the market

It cost me a thousand rupees to buy these 100 shares

I will repay these 100 shares to the person who lent them to me

Suppose the lender gets paid an additional Rs 1000

So my total cost is 2000 rupees

But the income I got was Rs 10,000

Thus shorting is said to generate revenue from a company’s share going down

Here we think the price will go down

Only then can we profit from this

If the share price we buy goes up

When that happens, it is not a profit but a huge loss

Likewise, the important issue for shorting is that

The profit on this is said to be limited

The biggest profit I am going to get from a share I bought for Rs.100 is Rs.100

But if the share price goes up, the loss is unlimited

The share price can be in the thousands or tens of thousands, so this is an event with terrible risk

In our story, the game stop is coming down and the Wall Street giants think they will break

They short the shares of the game stop

In addition, they are releasing newsletters

This is an unethical act

The game stop is looking for something to come back

They are looking at online media and investment is coming from China

They are seeking a partnership with Microsoft

Somehow they are looking to get back into the market and Wallstreet is trying to sell them

People on Wall Street are shorting millions of shares

Seeing this, others are selling shares and the share price is going down

So this poor company is losing money here

At this time, a social media app called Reddit comes into the picture

Reddit has a subreddit called Wall Street Bet

They are launching a campaign to end the Wall Street dictatorship

By saying that they should not harm a poor company

They ask everyone to buy a game stop share

The Wall Street giants have shorted it, thinking that the share price will go down

We saw people from all over the world later becoming part of this campaign

People started buying millions of shares

Slowly the share price at the game stop began to rise

There is an incident going on here called Short Squeezing

Short Squeezing occurs when the number of shortings is more than the available shares of the company

Now suppose in the example given earlier that the company has only 100 shares in total

But because of the different types of operations that take place

Suppose there is a shorting on more than a hundred shares

If the share price goes up at this time, people who have previously shortened are scared and are forced to buy it at any price.

The recurrence of unlimited losses can be seen during this short squeezing

Shorting at the game stop was 130 percent

That is, if there were 100 shares in the market, there were 130 short positions

The Reddit people came forward realizing this

They realized that if the price of this share went up, it would go up terribly

As a part of this, prices started going up

At this point the Wall Street giants are going to have a terrible loss

Not only that, they have to repay the stocks they have borrowed

If the price goes up further, they should have the money to buy it back

They are scared and are trying to buy back the market shares somehow

But there are no stocks in the market for everyone to buy because of such a huge shorting

This is why the price of this share is skyrocketing

The stock price was just four dollars

Now it can be seen rising to $ 450

People in Reddit are making an adamant decision that

The price of this stock will go up and it will not sell for any reason

Only then can the Wall Street giants be taught a lesson

People have decided that stocks will only sell if they reach $ 1,000, up from $ 450 now

So this is the issue with the game stop

So I think you understand exactly what this problem is

There is a debate going on as to whether this is good or bad

This is good and bad

The Wall Street giants can laern a lesson and the common man will benefit

But when something like this happens to Wall Street firms

Ordinary people have deposited money there

The fund they manage is ordinary men's money

It is common for people who really lose out when something happens to this fund

So this is good and bad

The next question is whether it is legal or illegal

It can never be said that it is illegal

They do nothing against the rules of our stock market

But I have to say that this is an unusual thing

But the Wall Street giants have a lesson to learn when something unusual happens

The last question is whether this is possible in India or not

Is it possible in India because we have a lot of big Facebook and WhatsApp groups?

This cannot be done in India for two reasons

We have a statutory body called the Security Exchange Board of India

They control exactly everything related to the Indian stock market

Such a thing is not possible in India because they are efficient

It's already told that short squeezing happens when the shorting is over 100 percent

Without the short squeezing, the price would not have gone up like this

In India, short positions should not go above 20%

Only 20% of a company's total shares can be shorted

But short squeezing will only happen if it goes above 100 percent

Then there will be no short squeezing in India

Although I have already used a lot of technical terms related to game stop

I think we have been able to simplify it

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