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It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingl

by jug 6y ago

It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that easy. It's not illegal. It's so easy that even semiprofessionals can understand exactly which stock are hedge fund favorites. It's not hard information to come by. And, here's the kicker: There is a potential monetary reward if you enter and exit a stock at the right moment. So it's simple to discover and execute, and there is a financial incentive, and it's not against the law. This is a trifecta of properties that makes this very interesting to follow indeed. I just saw this article too: As hedge funds try to cover losses, the rings are now spreading over the market: https://www.bloomberg.com/news/articles/2021-01-26/hedge-funds-fighting-short-raids-now-getting-hit-on-bullish-bets https://www.bloomberg.com/news/articles/2021-01-26/hedge-fun... The author speculates that this might even ultimately trigger a market correction.

andromeduck 6y ago
I'd argue that the last year or so of Tesla was the first major incarnation of this gamma squeeze + memes to burn short sellers but yeah GME is a while other level.
- ppod 6y ago
  There is kind of a continuum between cases that are pure squeeze 'n memes and ones that are more based on non-linear long term value propositions. Three years ago, I think you could make a case for Tesla that it was either going to go bankrupt or grow many times over, but not stay in between. It may even be that bankruptcy was the more likely outcome. But if you gather enough support in the belief that a successful outcome is possible, then it can become self-fulfilling, especially if capital is one of the main obstacles. The company can use capital raised from the boom in the share price to lower debt and invest. In the extreme case this could be true of almost any company. Imagine if GME were just a shell and a brand. Then they raise money, get a great board, hire industry experts, and go... whatever.. compete with Steam, turn the physical stores into e-sports venues, pivot to game development, whatever. Use the money to get the expertise, and you already have the brand and attention, which is now worth a lot more. That is kind of what happened with Tesla to some extent, although they already had a great brand a genius owner.
- slfnflctd 6y ago
  It's not just Tesla, either. There are a number of stocks that are grossly overvalued right now when you look at fundamentals. Lots of people have been talking here & everywhere else for the better part of the past year about how the Fed is printing money and it's all going into a stock bubble. Oh yeah, and cryptocurrencies. This GME thing is just one little piece of an overall new zeitgeist. I'm not about to even try to predict the next crash/bubble-pop, though. I just don't have the stomach for this kind of market. When a change comes, it may not happen in a predictable way. I think there's at least a chance we could somewhat be in uncharted territory here.
twic 6y ago
> It does feel like a watershed moment regarding hedge funds Let's wait six months. This story is being badly reported all over. I suspect the hedge funds will mostly be fine. >You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that easy. It's not illegal. Yes, it is, it's an abusive short squeeze, which is market manipulation.
- ClumsyPilot 6y ago
  If anything is market manipulation, its shorting over 100% of a company to push down it's share price even lower and destroy the company
  - cheph 6y ago
    How does a low share price "destroy the company"?
    - serf 6y ago
      by limiting financial opportunity for the devaluing company to the point that it inhibits normal every day business, creating a feedback loop that the company may be unable to recover from. This occurred to Lehman Brothers. Different industry, but they got shorted to the point that their clients withdrew their funds and they were left in a position that was ineligible/undesired for most loans. https://slate.com/news-and-politics/2011/08/does-it-matter-to-a-company-if-its-stocks-lose-value.html https://slate.com/news-and-politics/2011/08/does-it-matter-t...
      - cheph 6y ago
        > by limiting financial opportunity Financial opportunity to what? Be specific. None of the examples there really makes a lot of sense in this case. You think this pump (and coming dump) happening with GameStop would convince lenders to lend to GameStop at better rates? Maybe if they had no clue what was happening and did no due diligence, but that is not the case. And I doubt share price is the only consideration made by lenders, if their share P/E ratio was very low (which shorting would cause) then this would also affect their lending opportunities positively. You think they were planning to issue new shares? It would have been an amazingly stupid idea which likely would not have been approved by existing shareholders anyway and would have had much the same effect as shorting. Considerations for an investment bank is quite different from the considerations for a game retailer. EDIT: The claim that short selling contributed significantly to the demise of Lehman Brothers is also disputed: https://en.wikipedia.org/wiki/Lehman_Brothers#Short-selling_allegations https://en.wikipedia.org/wiki/Lehman_Brothers#Short-selling_...
Tenoke 6y ago
It's not quite that easy. You have to find a stock that's overshorted (>100% of shares here) irresponsibly (if they used e.g puts they'd be fine), buy a lot and hold it long enough. Also quite likely WSB money wasnt enough and it's only because other hedge funds jumped in that we got here. What Melvin did was risky and avoidable.
- grumple 6y ago
  The stock doesn’t actually need to be shorted that much. We’re seeing the same thing happen with Koss, BB, and AMC right now. The infamous VW short squeeze was also caused by significantly less short interest: https://www.autoweek.com/news/industry-news/a35340727/heres-how-the-gamestop-short-squeeze-is-like-the-vw-squeeze-of-2008/ https://www.autoweek.com/news/industry-news/a35340727/heres-...
  - Tenoke 6y ago
    Very true, but the less shorted or at least the bigger the difference between available shares and the short position the harder it is. VW in particular was shorted much less but something like 90+% of the shares were accounted for between Porsche and Germany to reach the accounted for shares + shorts position of over 100%.
  - argonaut 6y ago
    We are seeing them become the next meme stock that people are trying to pump. Unlike GameStop their pumps have very little to do with short squeezes because these stocks were not being shorted anywhere near as much as GameStop was.
    - grumple 6y ago
      Short squeezes can occur with significantly less short interest than 100% if others want to maintain controlling interest in a stock or are otherwise unwilling to sell except for over market value. Even a small change in a stock's liquidity can result in a large impact on available price.
jariel 6y ago
I'm sorry but this is a possibly irresponsible take for at least a few reasons. The populism on this issue is completely out of touch with reality. 1) As the stock pops due to irrational upwards pressure - the hedges funds might lose a bit, but in reality a lot of 'regular people' will be left holding the bag. When the stock inevitably crashes, those 'regular people' will lose a lot and it will probably be a more meaningful loss to them. 2) There is no easy way to make money doing this - you're literally promoting a collective ponzi scheme (!) whereby the only money made is by people putting more money in. 3) Bankers have a role to play in markets and that's by properly valuing them. Obviously there are tons of shenanigans, but otherwise, it's an essential role. 'Pumping and dumping stocks' is not value creating it's actually quite destructive. While Game Stop may appreciate being helped in some way, they are not going to appreciate their stock going insanely volatile. Why do you think they would actually want this? The populism on this issue is really out of hand. "So it's simple to discover and execute, and there is a financial incentive, " - please - no, this is completely irresponsible.
- ballenf 6y ago
  What about retail investors who looked at Gamestop before all this and thought it seemed like a reasonable investment, only to get wiped out by "irrational downward pressure" from hedge funds conspiring to short the stock 136%? We'll have to wait and see a bit, but the huge pop in Gamestock was likely more the result of funds covering shorts, not retail investors continuing to buy at these prices. So it feels really disingenuous to blame retail for these wild swings when they would not have been possible without the irresponsible hedge fund trading that came before.
  - fractionalhare 6y ago
    Hedge funds don't need to conspire for short interest to go over 100%. If a business is widely considered a viable short target, it usually just happens through regular market mechanics. Everyone wants to borrow it to sell it short, and they may end up borrowing it from someone who already bought it from a short seller.
- philistine 6y ago
wcoenen 6y ago
Short squeeze are nothing new, so it doesn't feel like a "watershed moment" to me. Big investors also do it to each other, e.g. the Herbalife short squeeze. https://money.cnn.com/2018/03/01/investing/herbalife-bill-ackman-carl-icahn/index.html https://money.cnn.com/2018/03/01/investing/herbalife-bill-ac...
lordnacho 6y ago
As a former fund manager, I think it mainly illuminates bad risk management practices at one specific fund. Why would you ever paint yourself in a corner where you lose 30% on a single name? It just makes me think all their other bets are also huge and simply lucky they haven't collapsed. Funds are also diverse, though. There will be a load of funds who have taken the other side to Melvin, based either on various fundamental insights, or technical, whatever.
- gonzo41 6y ago
  Success often comes down to execution of the play. If your building something it's about quality. If your making a bet, then it's about risks. This fund has/had bad risk managers.
  - spacemanmatt 6y ago
    Or they had ordinary risk managers whose ordinary schemes got attention from an internet forum with just enough ability to counter one of them.
- fractionalhare 6y ago
  30% has not been lost on a single name. It's publicly available information that every known short by the fund (particularly those with high short interest) is now being targeted, and is up tens to hundreds of percent in the past couple of days.
  - lordnacho 6y ago
    Fair enough, I hadn't considered I might be reading a skewed view of what the PnL distribution was. However it's still not a great look that the firm can be put in such a position. It's not actually an excuse that events are unprecedented. Thanks for your input. I've worked during such crises myself and it's stressful.
    - fractionalhare 6y ago
bko 6y ago
> And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. A lot of the people involved aren't just buying and holding. They're specifically buying/selling short dated out of the money options in order to move the price. Some understand the market microstructure and the various levers they have to make the price move using what is effectively leverage. > Seriously. It's that easy. It's not illegal. Finance is highly regulated and arbitrarily so. If you think the lawmakers and regulators will throw their hands up and say geez, it's technically legal, carry on, you're sorely mistaken. Ideally finance is meant to be about allocation of capital. If a market is allocating capital to a dying company just because meme, then the market isn't serving its purpose. I don't see how this is different than what is constantly being criticized such as flash crashes, contagion and large moves based on rumors, other than the group benefiting (fiscally irresponsible internet strangers vs fiscally irresponsible professionals) I know, hedge funds bad, and they do this crap all the time. That may be true, but this isn't going to end well for the average consumer. My prediction is reddit will shutdown wsb because that's what reddit does. And there will be more laws made targeting individuals engaging in this sort of activity (basically coordinating with groups of people). This may hurt newsletters and other financial venues. The large hedge funds will be fine, we might see a few bailouts, and life will go on.
- WanderPanda 6y ago
  Why is the solution always to either shut something down or to regulate? Why is educating people to act more responsibly never ever considered an option?
  - bko 6y ago
    I'm not arguing that shutting down or regulating is the best solution, but it is the most likely outcome. How would one go about educating people? There's been a lot of ink spilled on this story and it seems to have captured the public's imagination. Not all of the reporting is accurate, but all the major media outlets get out the point that this is essentially reckless market manipulation by a group of loosely banded individuals coordinating online. I doubt anyone participating in this will cut it out if just told to by some authoritative body.
Yizahi 6y ago
Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space.
- that_guy_iain 6y ago
  > Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space. Because the subreddit is famous for just losing money and lots of people just not knowing what they're doing. I'm sure there are a few traders on that reddit but I suspect it's like a professional programmer joining a dev bootcamp community. A whole bunch of people who are just learning and are doing crazy things. (I did crazy things when I was learning, hell, I sometimes do crazy things now)
- SuoDuanDao 6y ago
  WSB is an open space[1], accessible to ordinary retail investors. The majority of the money may be from large funds, but the majority of discussion is from working schmos who day trade as a hobby. That's very different from the closed environment we associate with high finance. [1]theoretically, in practise I'll predict it's about to be Septembered into oblivion edit: formatting
Melting_Harps 6y ago
> It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? I spent all night going through many of those threads, and I have to say they are ready to join Bitcoin once the SEC cracks down on them and freezes their Robinhood accounts and possibly even their bank accounts linked to Robinhood. If Melvin does go down it will be its own success, but now they're going full vigilante investor mode, and putting money in BB, AMC etc... this won't stop unless the State intervenes and could set a precedent and as you say create a 'watershed moment.' It won't be long until they realize what the long con really is: central bank based fiat currency that created these boom-bust cycles in the first place. I initially mocked them when I heard about them taking GME to its recent rise, and still kind of do as WSB is a joke even by their own admission; but that doesn't mean it cannot create positive change. After all comedians just use humour in their jokes to highlight and poke fun of some of Society's most absurd aspects with varying levels of success in reforming it. Dave Chappelle's latest monolouge at SNL after the election highlighted this very well.
fatnoah 6y ago
>It does feel like a watershed moment regarding hedge funds. Agree. I think we're all seeing that hedge success for many is more about market influence than actual market prediction.
cacarr 6y ago
Now Robinhood has stopped allowing purchases of those securities. While I suppose Robinhood would like to have good relations with hedge funds leading up to an IPO, they just pissed off a significant fraction of their actual customers -- and boy are they ever gonna get an earful about it.

by jug 6y ago

andromeduck 6y ago

I'd argue that the last year or so of Tesla was the first major incarnation of this gamma squeeze + memes to burn short sellers but yeah GME is a while other level.

ppod 6y ago
There is kind of a continuum between cases that are pure squeeze 'n memes and ones that are more based on non-linear long term value propositions. Three years ago, I think you could make a case for Tesla that it was either going to go bankrupt or grow many times over, but not stay in between. It may even be that bankruptcy was the more likely outcome. But if you gather enough support in the belief that a successful outcome is possible, then it can become self-fulfilling, especially if capital is one of the main obstacles. The company can use capital raised from the boom in the share price to lower debt and invest. In the extreme case this could be true of almost any company. Imagine if GME were just a shell and a brand. Then they raise money, get a great board, hire industry experts, and go... whatever.. compete with Steam, turn the physical stores into e-sports venues, pivot to game development, whatever. Use the money to get the expertise, and you already have the brand and attention, which is now worth a lot more. That is kind of what happened with Tesla to some extent, although they already had a great brand a genius owner.
slfnflctd 6y ago
It's not just Tesla, either. There are a number of stocks that are grossly overvalued right now when you look at fundamentals. Lots of people have been talking here & everywhere else for the better part of the past year about how the Fed is printing money and it's all going into a stock bubble. Oh yeah, and cryptocurrencies. This GME thing is just one little piece of an overall new zeitgeist. I'm not about to even try to predict the next crash/bubble-pop, though. I just don't have the stomach for this kind of market. When a change comes, it may not happen in a predictable way. I think there's at least a chance we could somewhat be in uncharted territory here.

twic 6y ago

> It does feel like a watershed moment regarding hedge funds Let's wait six months. This story is being badly reported all over. I suspect the hedge funds will mostly be fine. >You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that easy. It's not illegal. Yes, it is, it's an abusive short squeeze, which is market manipulation.

ClumsyPilot 6y ago
If anything is market manipulation, its shorting over 100% of a company to push down it's share price even lower and destroy the company
- cheph 6y ago
  How does a low share price "destroy the company"?
  - serf 6y ago
    by limiting financial opportunity for the devaluing company to the point that it inhibits normal every day business, creating a feedback loop that the company may be unable to recover from. This occurred to Lehman Brothers. Different industry, but they got shorted to the point that their clients withdrew their funds and they were left in a position that was ineligible/undesired for most loans. https://slate.com/news-and-politics/2011/08/does-it-matter-to-a-company-if-its-stocks-lose-value.html https://slate.com/news-and-politics/2011/08/does-it-matter-t...
    - cheph 6y ago
      > by limiting financial opportunity Financial opportunity to what? Be specific. None of the examples there really makes a lot of sense in this case. You think this pump (and coming dump) happening with GameStop would convince lenders to lend to GameStop at better rates? Maybe if they had no clue what was happening and did no due diligence, but that is not the case. And I doubt share price is the only consideration made by lenders, if their share P/E ratio was very low (which shorting would cause) then this would also affect their lending opportunities positively. You think they were planning to issue new shares? It would have been an amazingly stupid idea which likely would not have been approved by existing shareholders anyway and would have had much the same effect as shorting. Considerations for an investment bank is quite different from the considerations for a game retailer. EDIT: The claim that short selling contributed significantly to the demise of Lehman Brothers is also disputed: https://en.wikipedia.org/wiki/Lehman_Brothers#Short-selling_allegations https://en.wikipedia.org/wiki/Lehman_Brothers#Short-selling_...

Tenoke 6y ago

It's not quite that easy. You have to find a stock that's overshorted (>100% of shares here) irresponsibly (if they used e.g puts they'd be fine), buy a lot and hold it long enough. Also quite likely WSB money wasnt enough and it's only because other hedge funds jumped in that we got here. What Melvin did was risky and avoidable.

grumple 6y ago
The stock doesn’t actually need to be shorted that much. We’re seeing the same thing happen with Koss, BB, and AMC right now. The infamous VW short squeeze was also caused by significantly less short interest: https://www.autoweek.com/news/industry-news/a35340727/heres-how-the-gamestop-short-squeeze-is-like-the-vw-squeeze-of-2008/ https://www.autoweek.com/news/industry-news/a35340727/heres-...
- Tenoke 6y ago
  Very true, but the less shorted or at least the bigger the difference between available shares and the short position the harder it is. VW in particular was shorted much less but something like 90+% of the shares were accounted for between Porsche and Germany to reach the accounted for shares + shorts position of over 100%.
- argonaut 6y ago
  We are seeing them become the next meme stock that people are trying to pump. Unlike GameStop their pumps have very little to do with short squeezes because these stocks were not being shorted anywhere near as much as GameStop was.
  - grumple 6y ago
    Short squeezes can occur with significantly less short interest than 100% if others want to maintain controlling interest in a stock or are otherwise unwilling to sell except for over market value. Even a small change in a stock's liquidity can result in a large impact on available price.

jariel 6y ago

I'm sorry but this is a possibly irresponsible take for at least a few reasons. The populism on this issue is completely out of touch with reality. 1) As the stock pops due to irrational upwards pressure - the hedges funds might lose a bit, but in reality a lot of 'regular people' will be left holding the bag. When the stock inevitably crashes, those 'regular people' will lose a lot and it will probably be a more meaningful loss to them. 2) There is no easy way to make money doing this - you're literally promoting a collective ponzi scheme (!) whereby the only money made is by people putting more money in. 3) Bankers have a role to play in markets and that's by properly valuing them. Obviously there are tons of shenanigans, but otherwise, it's an essential role. 'Pumping and dumping stocks' is not value creating it's actually quite destructive. While Game Stop may appreciate being helped in some way, they are not going to appreciate their stock going insanely volatile. Why do you think they would actually want this? The populism on this issue is really out of hand. "So it's simple to discover and execute, and there is a financial incentive, " - please - no, this is completely irresponsible.

ballenf 6y ago
What about retail investors who looked at Gamestop before all this and thought it seemed like a reasonable investment, only to get wiped out by "irrational downward pressure" from hedge funds conspiring to short the stock 136%? We'll have to wait and see a bit, but the huge pop in Gamestock was likely more the result of funds covering shorts, not retail investors continuing to buy at these prices. So it feels really disingenuous to blame retail for these wild swings when they would not have been possible without the irresponsible hedge fund trading that came before.
- fractionalhare 6y ago
  Hedge funds don't need to conspire for short interest to go over 100%. If a business is widely considered a viable short target, it usually just happens through regular market mechanics. Everyone wants to borrow it to sell it short, and they may end up borrowing it from someone who already bought it from a short seller.
philistine 6y ago

wcoenen 6y ago

Short squeeze are nothing new, so it doesn't feel like a "watershed moment" to me. Big investors also do it to each other, e.g. the Herbalife short squeeze. https://money.cnn.com/2018/03/01/investing/herbalife-bill-ackman-carl-icahn/index.html https://money.cnn.com/2018/03/01/investing/herbalife-bill-ac...

lordnacho 6y ago

As a former fund manager, I think it mainly illuminates bad risk management practices at one specific fund. Why would you ever paint yourself in a corner where you lose 30% on a single name? It just makes me think all their other bets are also huge and simply lucky they haven't collapsed. Funds are also diverse, though. There will be a load of funds who have taken the other side to Melvin, based either on various fundamental insights, or technical, whatever.

gonzo41 6y ago
Success often comes down to execution of the play. If your building something it's about quality. If your making a bet, then it's about risks. This fund has/had bad risk managers.
- spacemanmatt 6y ago
  Or they had ordinary risk managers whose ordinary schemes got attention from an internet forum with just enough ability to counter one of them.
fractionalhare 6y ago
30% has not been lost on a single name. It's publicly available information that every known short by the fund (particularly those with high short interest) is now being targeted, and is up tens to hundreds of percent in the past couple of days.
- lordnacho 6y ago
  Fair enough, I hadn't considered I might be reading a skewed view of what the PnL distribution was. However it's still not a great look that the firm can be put in such a position. It's not actually an excuse that events are unprecedented. Thanks for your input. I've worked during such crises myself and it's stressful.
  - fractionalhare 6y ago

bko 6y ago

> And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. A lot of the people involved aren't just buying and holding. They're specifically buying/selling short dated out of the money options in order to move the price. Some understand the market microstructure and the various levers they have to make the price move using what is effectively leverage. > Seriously. It's that easy. It's not illegal. Finance is highly regulated and arbitrarily so. If you think the lawmakers and regulators will throw their hands up and say geez, it's technically legal, carry on, you're sorely mistaken. Ideally finance is meant to be about allocation of capital. If a market is allocating capital to a dying company just because meme, then the market isn't serving its purpose. I don't see how this is different than what is constantly being criticized such as flash crashes, contagion and large moves based on rumors, other than the group benefiting (fiscally irresponsible internet strangers vs fiscally irresponsible professionals) I know, hedge funds bad, and they do this crap all the time. That may be true, but this isn't going to end well for the average consumer. My prediction is reddit will shutdown wsb because that's what reddit does. And there will be more laws made targeting individuals engaging in this sort of activity (basically coordinating with groups of people). This may hurt newsletters and other financial venues. The large hedge funds will be fine, we might see a few bailouts, and life will go on.

WanderPanda 6y ago
Why is the solution always to either shut something down or to regulate? Why is educating people to act more responsibly never ever considered an option?
- bko 6y ago
  I'm not arguing that shutting down or regulating is the best solution, but it is the most likely outcome. How would one go about educating people? There's been a lot of ink spilled on this story and it seems to have captured the public's imagination. Not all of the reporting is accurate, but all the major media outlets get out the point that this is essentially reckless market manipulation by a group of loosely banded individuals coordinating online. I doubt anyone participating in this will cut it out if just told to by some authoritative body.

Yizahi 6y ago

Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space.

that_guy_iain 6y ago
> Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space. Because the subreddit is famous for just losing money and lots of people just not knowing what they're doing. I'm sure there are a few traders on that reddit but I suspect it's like a professional programmer joining a dev bootcamp community. A whole bunch of people who are just learning and are doing crazy things. (I did crazy things when I was learning, hell, I sometimes do crazy things now)
SuoDuanDao 6y ago
WSB is an open space[1], accessible to ordinary retail investors. The majority of the money may be from large funds, but the majority of discussion is from working schmos who day trade as a hobby. That's very different from the closed environment we associate with high finance. [1]theoretically, in practise I'll predict it's about to be Septembered into oblivion edit: formatting

Melting_Harps 6y ago

> It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? I spent all night going through many of those threads, and I have to say they are ready to join Bitcoin once the SEC cracks down on them and freezes their Robinhood accounts and possibly even their bank accounts linked to Robinhood. If Melvin does go down it will be its own success, but now they're going full vigilante investor mode, and putting money in BB, AMC etc... this won't stop unless the State intervenes and could set a precedent and as you say create a 'watershed moment.' It won't be long until they realize what the long con really is: central bank based fiat currency that created these boom-bust cycles in the first place. I initially mocked them when I heard about them taking GME to its recent rise, and still kind of do as WSB is a joke even by their own admission; but that doesn't mean it cannot create positive change. After all comedians just use humour in their jokes to highlight and poke fun of some of Society's most absurd aspects with varying levels of success in reforming it. Dave Chappelle's latest monolouge at SNL after the election highlighted this very well.

fatnoah 6y ago

>It does feel like a watershed moment regarding hedge funds. Agree. I think we're all seeing that hedge success for many is more about market influence than actual market prediction.

cacarr 6y ago

Now Robinhood has stopped allowing purchases of those securities. While I suppose Robinhood would like to have good relations with hedge funds leading up to an IPO, they just pissed off a significant fraction of their actual customers -- and boy are they ever gonna get an earful about it.