Paper Infomation
Inspiration of "Game Stop" Short Selling Event to Stock Market
Full Text(PDF, 357KB)
Author: Tianji Zhang
Abstract: The stock price of "Game stop" company rose sharply in 2021, and the market value deviated greatly from the intrinsic value of the company, and then fell quickly. Many retail investors suffered heavy losses and lost all their money. The event, which made Wall Street history, could be the start of financial reform or a cautionary tale about the order, structure and supervision of global financial markets. Under the background of extremely loose monetary policy implemented by the Federal Reserve and strong bailout policy of the US government, investment popularization and financial democracy triggered by fintech innovation are dominated by Wall Street elites. Some seemingly fair and reasonable financial transactions are actually tools for traditional elites to exploit the defects of financial markets and financial instruments anonymously to plunder the wealth of the public. This is the key reason why the company is being shorted. The democratisation of investment and the democratisation of finance are already well under way. The difficulty will be how to increase the intensity of financial reform and innovation while improving the rules of regulation to prevent this from happening again. Based on the analysis of the stock shorting mechanism, this paper analyzes transmission process, mechanism and operation mode of the Game stop company being shorted, analyzes the present development status of the shorting mechanism in our capital market, and summarizes the influence of the shorting mechanism. This paper studies the operating conditions of " Game stop " company, the unprecedented background of being done, and the reasons for being shorted. At the same time, it analyzes the specific conditions of our national conditions and the rules of the stock market, points out the existing problems in our country, and further analyzes the causes of these problems from the system and rational level. It draws the enlightenment of this incident to our stock market supervision in three aspects: financial democratization, government supervision and rational investment of investors.
Keywords: Game Stop Event, Short-Selling Mechanism, Stock Market
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