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AI must be stopped... (lemmy.world)
submitted 1 year ago by to c/whitepeopletwitter@sh.itjust.works
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[–] 1 point 1 year ago* (4 children)

No I'm not exactly interested in shorting, I didn't get wound up with the apes on Reddit. I'm mostly just curious, I don't understand it.

Edit: I understand what shorting is, I do not understand why shorting happens to the companies it happens to.

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  • [–] 1 point 1 year ago (3 children)

    I understand what shorting is, I do not understand why shorting happens to the companies it happens to.

    People believing the current price to be higher than the future price.

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  • [–] 1 point 1 year ago* (last edited 1 year ago) (2 children)

    But is that it? Isn't shorting entirely speculative and based on whether anyone is actually watching the stock closely? To my understanding, that was the reason VC firms chose businesses like Gamestop and BB&B to short. Am I wrong about this?

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  • [–] 2 points 1 year ago (1 child)

    Isn't shorting entirely speculative and based on whether anyone is actually watching the stock closely?

    What's correct about that sentence is that shorting is speculative. It's a type of contract a person can use, to their financial benefit, if they believe strongly that the market price of a stock or product will decrease.

    Where they get that believe from, is irrelevant. I didn't follow the gamestop meme closely, so can't speculate on their believe.

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  • [–] 2 points 1 year ago

    Ah, ok. Yeah my understanding was they would short stocks that were likely to decrease in value down the line and that they chose stocks like GS or BB&B because it was unlikely for something like the wallstreetbets shenanigans to happen (emphasis on unlikely).

    Again, I'm not interested in shorting. I feel like I need to emphasize that lol.

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