Posted on 01/27/2021 6:50:03 PM PST by SeekAndFind
Users of the subreddit r/WallStreetBets are fighting back against the multi-billion dollar hedgefunds in a rather creative way. GameStop became one of the most shorted stocks on Wall Street last week, after a newsletter from a short seller, Andrew Left of Citron Capital, encouraged people to short the company. Gamestop had a short interest of 102% of its shares, making it one of the most shorted on the market.
To “short” a company is to bet on the price of the stock falling, in simple terms. The hedgefunds would borrow shares of the company from other investors, sell the shares on the markets at the current high price, then buy them back at the expected future low price, and return them to the investors, pocketing a profit.
In response, the users of the subreddit saw a perfect opportunity to “own” the hedgefunds, as the newsletter from Left allegedly noted some of them buying GameStop stock. By buying GameStop stock, they could initiate a “short squeeze,” sending the price of the stock up, and forcing the hedgefunds to buy more of the stock to cover themselves.
Who is winning the war:
Most shorted names exploding higher, as top hedge fund position plummet pic.twitter.com/aEGnf5eCbH
— zerohedge (@zerohedge) January 27, 2021
The stock was then bought enmasse, with GameStop ending up as the most traded equity on the planet on Tuesday, beating out Apple, Tesla, and Microsoft. As a result, the price skyrocketed by hundreds of percent, and one of the hedge funds, Melvin Capital Management, had to be bailed out for $2.75 billion. The stock price went even further up after Elon Musk, the CEO of Tesla, tweeted out “Gamestonk.”
THEY DID IT: $GME was the most traded equity on the planet today w/ $20b in volume, more than $SPY, $AAPL and even the Mighty $TSLA. Surreal. pic.twitter.com/UxJPttsg4t
— Eric Balchunas (@EricBalchunas) January 26, 2021
Other stocks from “failing” companies that were targeted for shorts have also been boosted by the self-proclaimed “degenerates.” These include AMC, the cinema company who have been shut since the pandemic, BlackBerry, the makers of the popular phones from 10 years ago, and Nokia, another previous mobile phone giant.
Understandably, many on Wall Street and in the traditional financial media were very upset with the action taken on the GameStop stocks, comparing it to “cheering on hackers” defacing websites. NASDAQ’s Adena Friedman even claimed that they would halt trading on certain stocks if they match “social media chatter” with “unusual” stock activity, and a number of trading exchanges banned trades on GameStop and other stocks.
One Wall Street hedgefund trader told the New York Post that the situation was a “bloodbath,” and expressed his frustration that the “unwashed masses have figured out how to play the shorts” and beat them at their own game. “It’s f**king carnage,” he added.
Jennifer Epstein, Bloomberg’s White House reporter, asked Jen Psaki about what the Biden administration’s response to the rise in GameStop stock was, and asked if there had been “any conversations with the SEC about how to proceed.” Psaki replied by repeating that the Biden administration had appointed the first female Treasury Secretary Janet Yellen, and that Yellen and the White House economic team would be “monitoring the situation.”
Biden White House Press Secretary asked about GameStop, AMC and Blockbuster stock market drama.
She responds by reminding everyone that they have the FIRST FEMALE treasury secretary & says they’re “monitoring the situation.”pic.twitter.com/Lu2PR6NAdd
— The Columbia Bugle 🇺🇸 (@ColumbiaBugle) January 27, 2021
With the subreddit potentially coming under threat, WSB Chairman, an unofficial Twitter account for the subreddit, argued that if the subreddit was taken down for its role in the short squeeze, then “they better take down every single Wall Street hedge fund that has been endlessly using gangster tactics to make a quick buck.”
If they take down WallStreetBets, they better take down every single Wall Street hedge fund that has been endlessly using gangster tactics to make a quick buck.
— WSB Chairman (@WSBChairman) January 26, 2021
Some did come to the defence of the GameStop investors however. Speaking on CNBC, Chamath Palihapitiya, the CEO of Social Capital, was asked whether there was anything wrong with “the integrity of the system” for the stock to go up so much.
“The lack of integrity in the system is the precursor that cause GameStop to be sold short 136%, and for people to pile on and destroy a company in front of our eyes. That feels pretty wrong, and pretty un-American if you ask me,” Palihapitiya replied. “The fact that [GameStop] shouldn’t be allowed to exist because all of a sudden we decide that they should be obliterated into the ground, that feels pretty wrong to me.”
Billionaire CEO Chamath Palihapitiya debates against CNBC's Scott Wapner on people investing in Gamestop stocks pic.twitter.com/MHtvcB9umw
— SOUND (@itsavibe) January 27, 2021
The Hill’s Saagar Enjeti highlighted that short sellers had been manipulating the market for years, using the media to “force massive runs on well meaning companies all so they can make billions on the flip side… leeching off the American financial system,” and now they were upset at having the game flipped back on them by what he describes as the financial markets first “populist uprising.”
When Hedge Funders and others loot our markets its all good. But when retail investors destroy a hedge fund then all of a sudden CNBC analysts start calling for regulation, blame foreign powers, and talk "fundamentals"
I call BULLSHIT: https://t.co/DzoUsyy1T6 https://t.co/SxSksAu6oT
— Saagar Enjeti (@esaagar) January 27, 2021
Of course, the second biggest winners of the whole situation, just behind the users of r/WallStreetBets, are those who are simply sitting back and watching everything unfold with a bucket of popcorn.
It’s a state of the art video game distributor pic.twitter.com/372VHBWuQV
— LeftyCrypto🌹 (@LeftyCrypto) January 26, 2021
Pov: you just bankrupt a hedge fund pic.twitter.com/JdcUF21oYV
— puma (@OpticsPolice) January 27, 2021
businessmen after having a 2 hour crying fit because of redditors: pic.twitter.com/SNTNvDvVBF
— atrophy wife 🎀 (@zuza_real) January 27, 2021
Are they jumping out of windows yet?
Out the window is not.
That right there is why a lot of these kids are going to be charged with hate crimes
exactly! Sounds good to me.
Nothing wrong with poor people investing. But these kids are gambling .
I agree they are gambling, but so are those hedge funds that:
Take a huge short position in a company, then
Issue a report trashing the company, in an effort to drive the stock price down, thus making their short position very profitable.
The funds are also gambling, but they are doing in with a stacked deck, courtesy of corrupt politician who have set up the system to benefit the funds, in exchange for massive campaign donations. These politicians are in both parties.
The kids aren’t gambling. They are on a jihad. They are sending a message. It’s the autistic version of walking through the Capitol and making Congressmen hide and cower in fear.
It’s really pretty funny.
I’m convinced that so much of the political, financial and legal machinations we have seen in recent years — and accelerating in recent months — has been driven by political and media elites who outraged to the point of insanity at the realization that most Americans have nothing but utter, dismissive contempt for every government, media and financial institution in this country.
The goal is to destroy the hedge fund Wall Street bailout Biden backing scumbags and it was working.
Naturally to “protect small investors” they had to step in and stop it. The small investors put in their 100 or more just to watch the system burned.
Look for other anti-MAGA players to be targeted for economic destruction as well.
But this shows how yet another American institution is a totally rigged fraud. Hedge funds lost billions and called up their political puppets to step in.
More fun will be the billion dollar suit against the Trump-hating Reddit (who banned The Donald last year).
This isn’t investment. This is like the scene in the Dark Night where the Joker lights all the cash on fire.
Some men just wanna watch the world burn...
And they don’t care. They did this as an action of destruction. Destroy the hedge funds and Wall Street.
The fact it many money was a side effect.
But now the politicians will step in to rig the game and bailout the big boys who own them.
Remember, Wall Street teamed up with China to defeat Trump. You can’t beat the Dems until you dismantle every institution that supports them.
Exactly. It’s pushing through the doors and taking selfie’s with the George Washington statue.
The institutions that went after Trump can be taken down by moves like this. Many more plays to come. We have to fight an intellectual non military guerrila war. Hit and move. Next target. Then the next.
Maintain pressure and then our Tet Offensive is Trump 2024.
True, but each person (that’s the difference) will lose a couple hundred bucks. Theses are very small positions per person
It IS hilarious.
(They still gotta sell, tho :)
I’m in a stock called UWMC (United Wholesale Mortgage). Just watched the shorts methodically drive it over a couple weeks from $13 to $9.15 this morning before it finally popped up a little. I have no sympathy for the Hedge Funds. They are heartless thieves.
Monitoring the situation=waiting for the checks to clear
Janet Yellen is NOT the first female Treasury Secretary, that was Bay Buchanan
This is one of the most pleasurable things I have ever read about hedge funds in my entire lifetime. So few people know how hedge fund employees think and work. If they knew, would, um, meet them in the parking lot and, er, ____________________________________________________ them.
It was just a little Cancel Culture for the elites to enjoy.
That's the point. The /wallstreetbets membership jumped up by something like 750,000 people today. And remember, many of them just got $600 in helicopter money from our friends in DC. So that's about 450 million dollars to play with.
The hedge fund owners are up against a crowd of individual speculators who mostly couldn't care less if they lose their investment. For them it is an experience, and one which will make a lot of money for some of the cleverest of them.
I LOVE this guy simply LOVE HIM!!! He has the balls of a bull and is a PRIZE FIGHTER!!!! GO DAVE KICK SOME ASS!!!
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