Working Paper2024

Did the Game Stop for Hedge Funds?

Working Paper

In one sentence

Retail investors increasingly use social media to coordinate for ideological or strategic considerations.

Summary

We find evidence that public disclosures of hedge fund short positions attract retail investor activity on WallStreetBets, driving up prices of heavily shorted stocks and challenging institutional players. Hedge funds have responded by reducing short positions, leading to prolonged overpricing.

Data, code & appendices

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Research topics

WallStreetBetshedge fundsshort sellingretail investors