'The GAMESTOP situation is shaking the financial sector around the world'

The situation surrounding the shares of U.S. game retailer GameStop is shaking the financial sector around the world. As this incident has turned into a confrontation between individual investors and hedge funds and a short sale issue, attention is being paid to the impact on Korea. Some observers say that discussions on the ban on short selling in Korea as well as the strengthening and abolition of short selling regulations will spark.

According to the financial sector and foreign media on the 31st, the price of the game stop has fluctuated for a week, especially this month. According to the New York Stock Exchange, the price of GameStop shares started at $17.25 on January 4 this year and rose to $31.40 on the 13th. It was $43.03 on Jan. 21 and $65.01 on Jan. It rose 92.71 percent from the previous day's close to $147.98 on the 26th and again jumped 134.84 percent to $347.51 on the 27th. On Friday, 44.29 percent fell to $193.60 and 67.87 percent jumped to $325.00 on Tuesday.

GameStop's market capitalization, which stood at $1.3 billion (1.5 trillion won) at the end of last year, surged to more than $22.3 trillion).

GameStop is a game retailer founded in 1984 in the United States. It mainly sells PC games and video games. Then, did the stock price soar because the business outlook of GameStop is good?

The situation is the opposite. As online purchases of games increase due to the spread of Corona 19, the business outlook of the retail store GameStop is expected to be poor. However, the situation was triggered by the short sale of hedge funds aiming for this.

Hedge funds such as Melvin Capital and Citron Research have started short selling after pessimistic views of stock prices. Citron Research publicly released its pessimistic outlook, prompting stock prices to fall and other investors to participate in short selling. Gamestop stocks, which had been trading at around 39 to 40 dollars, were expected to fall to around 20 dollars. Citron Research ridiculed GameStop as a failed retailer through Twitter, saying, "The person who buys stocks now is a fool in the poker game."

Short selling literally means "selling what you don't have," which means placing an order for sale without holding stocks. If stock prices fall in the future than they are now, the short-selling place will bring profits. On the other hand, if future stock prices rise, they will lose money. In the financial sector, short selling is seen as an investment technique and a product, but individual investors blame short selling for large-scale capital could lead to a fall in stock prices.

U.S. private investors, so-called ants, were angry as Citron Research and others publicly announced that they were short-selling. About 4 million individual investors declared war on hedge funds through Wall Street Betts, an online community in the U.S. And I started to buy game stop stocks.