KALAMAZOO, Mich. (WOOD) — A Kalamazoo man has paid for digital billboards referencing the Reddit group WallStreetBets and the short squeeze of hedge funds which were occurring with shares like GameStop and AMC Leisure.
Pictures of the Save AMC billboard on the Wings Occasion Middle are going viral on social media.
Brett Reath, the person behind the billboards, says he’s poking enjoyable at Wall Avenue and desires to convey consideration to what hedge funds have been doing for many years by shorting shares.
The messages will seem for just a few days in the course of the morning commute and night rush hour.
“I believed it was a extremely attention-grabbing method to type of make clear the scenario that’s been happening,” Reath stated.
Reath says buying the promoting was not costly, he paid $100 a day for 2 billboards to run within the rotation at set instances.
He says shorting shares is nothing new and hedge funds have been battling it out for years, putting bets on corporations they assume will quickly be bankrupt or drop in value.
“I feel what occurred right here is you had just a few hedge funds profiting from corporations that had been hardest hit by the pandemic,” Reath stated.
Shorting includes borrowing shares from a brokerage and promoting the borrowed inventory to different buyers.
Once they attain an expiration date, substitute shares are bought and returned. If the inventory goes down, they purchase these shares at a low value and maintain the income. If it goes up, they must pay the distinction to the brokerage and lose cash. The method is taken into account very dangerous as a result of the potential for losses could be infinite relying on how excessive the inventory climbs.
The low-cost brokerage Robinhood ended up restricting shopping for and solely allowed promoting.
“I don’t assume you possibly can forestall folks from shopping for a inventory in the event that they need to. I imply, in the event that they need to purchase a inventory and it’s the worst thought ever, that’s their proper to do this,” Reath stated.
Whereas there may be debate over why this occurred, some say the corporate didn’t have sufficient funds in reserve to cowl the elevated quantity of shopping for.
Reath says the billboards aren’t meant as funding recommendation and that buyers ought to rigorously take into account the dangers when shopping for any shares.