Ali Velshi Profile picture
30 Jan, 15 tweets, 6 min read
By now you have undoubtedly seen the craziness going on in the stock market, with a selection of stocks surging hundreds if not thousands of percent in a matter of days or even hours, along with a whole bunch of financial jargon. So what exactly is going on? #velshi
One major term you have heard is "shorting" - which is just placing a bet that a stock will go down in price. #velshi
An investor can make money on this type of gamble by borrowing shares from a broker, w/o initially paying for them, selling them immediately & then later buying the shares at a lower price & returning them to the broker, keeping the difference in price as profit. #velshi
For example, an investor borrows 1 share of stock XYZ at $200 & sells it. The investor now has $200 at an initial cost of $0. However, the investor stills owes the broker that 1 share. #velshi
The gamble is that the price of the stock XYZ will go down - let's say to $100 a share. The investor can then buy the 1 share that it owes the broker at that lower $100 price. #velshi
This means it costs the investor less to buy XYZ than what it has already sold XYZ for & the investor can keep that extra $100 difference from the $200 sale price. #velshi
Of course, the price of the stock could increase - and the investor still owes the broker the share XYZ, in which case the investor loses money. Potentially a LOT of money. #velshi
Using our example, let's say stock XYZ increases to $220 dollars. The investor still has to buy the owed share, but it now cost $20 more than it was initially sold for, and the investor loses that money. That's the basis for what has been going on. #velshi
What basically happened was within the last week or so some people on the Reddit 'WallStreetBets' noticed that some hedge funds were placing massive “short“ bets on several distressed widely known companies. #velshi
Short bets were placed mainly on Gamestop but also Bed Bath and Beyond, American Airlines, AMC Theaters, Blackberry, and others. #velshi
These redditers then essentially crowdsourced a whole bunch of people to bet AGAINST the hedge funds, buying shares at increasingly inflated prices in order to prevent the stock prices from going down. #velshi
As the price kept going up, some of the hedge funds were forced to start buying shares to replace the ones they had borrowed when they initially expected the stocks to drop in value, in order to cut their losses, in what is known as a 'short squeeze'. #velshi
And all that buying - that new demand - has the effect of dramatically increasing the price of the stocks. #velshi
There has also been a lot of talk & consternation that some brokerage & trading firms popular with newer traders, including one called 'Robinhood', cut off the average person's ability to trade in some of these volatile companies. #velshi
That led people to call for investigations into why regulators go after small investors when they move the market, but not big hedge funds which, some people say, manipulate markets as a normal course of their business. #velshi

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More from @AliVelshi

31 Jan
Last week General Motors announced plans to be carbon neutral in its global operations by 2040 & to offer only zero-emissions vehicles even by 2035. #velshi
I’ve had my share of things to say about GM's poor corporate responsibility & leadership for years but now, it seems, even GM sees the writing on the wall: the future is about cutting emissions, transitioning to electric vehicles or other zero-emissions technologies #velshi
America is less than 5% of the world’s population, but uses 20% of all the oil produced in the world every day. Gasoline for driving accounts for half of that. #velshi
Read 11 tweets
30 Jan
President Biden signed an executive order phasing out the federal govt's use of privatized prisons. It instructs the Justice dept. NOT to renew contracts with privately-operated prisons; a policy that was first implemented under Obama, then reversed in 2017 by Trump. #velshi
Private prisons are a stupid, amoral idea. So how did we end up with them in the first place? For starters, the U.S. is the most prolific incarcerator on the planet. That is a fact & it is not new. #velshi
2018 figures show the U.S. ranks number one when it comes to the total number of incarcerated people. It has roughly 300,000 more people that have been sentenced to prison than China does... which has literally one billion more in population. #velshi
Read 13 tweets
30 Jan
This past week, before he did an interview with a top-rated AM radio station in St. Louis, and THEN being interviewed on CNN, Senator @HawleyMO wrote an Op-Ed for the fourth highest circulated newspaper in America. #velshi
In all of those extremely high-profile appearances, he repeated his grievance that he is being quote "cancelled" and quote "muzzled." That's rich. #velshi
Hawley freely discussing his being "muzzled" seems lost on him as he writes about how "corporate monopolies and the left team up to shut down speech they don't like and force their political agenda on America…” #velshi
Read 13 tweets
24 Jan
It may sound counterintuitive to be having a conversation but there are some issues that just don’t have two sides. Nobody is in favor of tornadoes, or cancer, or against pizza – maybe pineapple on pizza, but not pizza itself. #velshi
There are, in fact, things that we can all agree upon. Unanimously. Or at least within a very VERY small margin of error. What led to the second impeachment of the former president is one of those things that doesn’t have two sides. #velshi
There are many who claim to be against the 2nd impeachment but, when you examine those claims, they are political, or maybe even constitutional when considering impeaching a president whose no longer in office. #velshi
Read 11 tweets
23 Jan
I have watched every presidential inauguration that I can remember, since I was a little boy, and long before I ever imagined I would live in America. But I had never watched one the way I watched the inauguration of Joe Biden. #velshi
I’d never considered the details leading up to an inauguration. I watched this one like a nervous parent, making sure everything went as planned. #velshi
Thanks to the last four years, everything is different, now. Our demons are on full display, our Union is certifiably imperfect. Our nation is divided. #velshi
Read 13 tweets
17 Jan
Tomorrow is Martin Luther King Jr day and, in a year marked by constant and tremendous racial strife, the meaning of a day honoring a man who was committed to PEACEFULLY fighting for civil rights is even more poignant. #velshi
Signed into law in 1983 by Ronald Reagan, #MLK day has become a national day of service during which people volunteer to help others in their community, which is fitting because it took a community to make #MLK day happen in the first place. #velshi
The campaign to create a federal holiday in his name began just 4 days after Dr. King’s assassination in 1968 when Michigan Congressman John Conyers introduced a resolution to make it happen. It failed. #velshi
Read 9 tweets

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