Throwing Darts at a Board nationalaffairs.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from nationalaffairs.com Daily Mail and Mail on Sunday newspapers.
Source: Shutterstock
February 18, 2021 SHARE
Although brick-and-mortar companies like GameStop and AMC Theaters have given investors reason to count them out of stock market success, a huge surge via a “short squeeze” was both predicted and expected in recent research by an expert at Washington University in St. Louis.
In fact, he and his co-authors noticed the everyday investor talk behind GameStop percolating online in 2020.
“The probability of short squeeze, we document, has been a signal and potential predictor of a big return for a while as we show in the paper but has exploded this year, and these chat rooms provide a forum to discuss it and even coordinate,” said Ilias Filippou, visiting assistant professor of finance at Olin Business School.