Impact Analysis of Short Selling on Market Investors: Taking the Fluctuation of GameStop's Stock Price as an Example

This paper focuses on the impact of short selling on investors and related policy suggestions. Based on the stock price, trading volume, retail investor shareholding ratio of GameStop in 2021, and sample data of posts on social media platforms, it clarifies the motives of retail investors in their confrontation with short-selling companies and the related impacts. The research finds that in the GameStop incident, both short-selling institutions and the majority of retail investors suffered certain losses. From the perspective of the motives behind retail investors' behavior, on the one hand, some early investors were influenced by the view that GameStop's stock was seriously undervalued as posted on online channels, which provided a basis for value judgment for making corresponding investment decisions in the market. On the other hand, social media platforms became a key catalytic factor. Through the rapid dissemination of information and the mechanism of emotional mobilization, they effectively consolidated the consensus among retail investors, strengthened their willingness to participate in market games, and ultimately formed a market force to confront short-selling institutions. This research can enable more individual investors to understand short selling and guide them to make more rational decisions. It can also serve as a reminder to regulatory authorities to strengthen market supervision.