GameStop

Malthusian

HansOndabush said:

This disproves the 'efficient market thesis' that the share price reflects all known information.

No it doesn't. The efficient market hypothesis states that the share price reflects all known information plus a random element. This is the random element.

If there was no random element in the efficient market hypothesis, all share prices would stay exactly the same until some new piece of information emerged. Such an obviously stupid hypothesis wouldn't have got off the ground, let alone been discussed for decades.

The efficient market hypothesis does not say that the market is always right, it says that you can't get rich by exploiting information the market already knows. E.g. "I'm going to sell UK shares cos Brexit." (And you can't get rich by exploiting information the market doesn't know as that's insider trading.)

norsefox

Malthusian said:

HansOndabush said:

This disproves the 'efficient market thesis' that the share price reflects all known information.

No it doesn't. The efficient market hypothesis states that the share price reflects all known information plus a random element. This is the random element.

If there was no random element in the efficient market hypothesis, all share prices would stay exactly the same until some new piece of information emerged. Such an obviously stupid hypothesis wouldn't have got off the ground, let alone been discussed for decades.

The efficient market hypothesis does not say that the market is always right, it says that you can't get rich by exploiting information the market already knows. E.g. "I'm going to sell UK shares cos Brexit." (And you can't get rich by exploiting information the market doesn't know as that's insider trading.)

Completely agree.
 What's the line?  The market can remain irrational longer than you can remain solvent?
Shorting a share into oblivion already means that a share price is artificially deflated.  Now it is artificially inflated. 
After all of this, it will revert to what most might call a 'fair' price in the region of $20-$30.  Not $4 and and not $400.

BananaRepublic

Malthusian said:

HansOndabush said:

This disproves the 'efficient market thesis' that the share price reflects all known information.

No it doesn't. The efficient market hypothesis states that the share price reflects all known information plus a random element.

https://en.wikipedia.org/wiki/Efficient-market_hypothesis
https://www.investopedia.com/terms/e/efficientmarkethypothesis.asp