Rebel traders disrupted yet another company short selling

Small investors have bought massive shares of American Airlines. As a result, the airline’s share of the so-called front-door business in New York was up to 87% ahead. American Airlines is thus the next target for investors who organize themselves through the Reddit website and other social media.

Earlier, Reddit investors joined in large numbers at GameStop and AMC’s video game store. As a result, the stock market prices of these companies increased by hundreds of percent, and the small investors made sure that speculators lost a lot of money.

Companies that suffer greatly from the pandemic crisis are regularly targeted by these shortsellers. They then borrow a share for a certain time, sell it and hope to be able to buy it back for a lower amount before the agreed time. Sometimes this is accompanied by negative reports on the companies the shortsellers are targeting.

Explanations for the sudden rise of the Reddit investors range from anger at the way the financial world works and has a relatively large impact on American politics to boredom with the ongoing coronary measures. The emergence of apps that can trade in shares cheaply would also contribute to the trend.

One of those apps is American RobinHood. That company has now made it impossible to trade in GameStop and AMC shares, although it is certainly not clear that investors are doing something that is prohibited.