This week, a group of investors managed to take a stock worth just a few dollars, and catapult it up to nearly $500. In the process, they put what is known as a short squeeze on some hedge funds on Wall Street, resulting in those funds losing billions of dollars on paper.   

Mike Onstad is with Weyburn Security. He explained what short selling is, which is what the whole situation boiled down to.   

“you basically borrow a stock from somebody at a certain price, then you wait for it to go down, then you buy it back at a lower price, then you return that stock and you make a profit on it at that point,” explained Onstad.   

The story itself is making headlines around the world. It is also leading to people wondering what sort of impacts this could have on investments in general that people may have, such as pension funds. Onstad pointed out that pensions typically avoid high-risk funds like hedge funds.  

“I don’t think people are going to be affected by this, other than people who are directly related to that hedge fund,” he pointed out.  

The move is targeting one specific stock – GameStop, a company that has seen better days, and had seen its value plummet in the past year. The move to short the stocks was seen by those who frequent the forum WallStreetBets, on the popular website Reddit, who decided to take action.  

“When he is shorting it, they decided they were going to buy this stock – this huge group of Reddit people are going to buy that stock, which pushes the price way up,” Onstad added. The short, which is basically a bet that the value of the stock will decline, then results in a loss of money.  

“It’s kind of a complicated situation, and very unique as it’s never really been done.” 

At the end of the trading day on Friday, GameStop was at $325 a share, up by $131.40 from the start of the trading day.