Let's just assume that there are 100 shares of GameStop (worldwide) and go from there. Let's assume that the price per share/stock before all of this was $100 (in a "good" economy, etc.). How would this all work?

A nice timeline, step by step, line by line would be nice. For ex:

  1. Stock is selling at $100 per share (100 shares total). June 20XX

  2. Economy starts tanking, stock now at $95 per share. August 20XX

  3. People start predicting that it will go down further, thus they start "betting" (insert definitions that are accessible and not jargony), etc.

^ something like that would be nice. Thanks!

  • spinachupper [he/him]
    ·
    4 years ago

    When you short a stock, you are actually ‘borrowing’ it, before immediately selling it to someone.

    Who are they borrowing it from?

    • FRIENDLY_BUTTMUNCHER [she/her]
      ·
      4 years ago

      Someone who already owns it, likely an institution. They benefit by taking interest on the loan.

      Sometimes portfolio managers will allow people to short stocks that they own. So if you have a portfolio with google in it, your portfolio may allow someone to short the stock from them while you own it.