“They are down 2/3 from the peak without ever having achieved Nasdaq-like valuations.”
Some of us believe in the herd instinct. If it was strictly company valuation then the markets wouldn’t behave in the manner that they do. All stocks in a sector would not decline/rise at the same time.
I wonder if the hedge funds are getting margin calls on their computer trades since no one seems to be following the rules. What makes you think the apply them to anyone but individual investors.
For one thing, the prime brokerages from whom they have margin loans and with whom they are holding these positions would shut them down and liquidate their assets. Just like a normal brokerage.