4 ms·

This narrative doesn't make any sense. Hedge funds aren't a monolithic entity. Some hedge funds lost billions of dollars on shorts. Redditors made millions of d

by Aunche 6y ago

This narrative doesn't make any sense. Hedge funds aren't a monolithic entity. Some hedge funds lost billions of dollars on shorts. Redditors made millions of dollars. Where do you think the rest of the money went to? That's right, other, more powerful, hedge funds. BlackRock held 9.2 million shares as of a few weeks ago.

dan-robertson 6y ago
BlackRock hold everything. It doesn’t really mean anything to say that they hold a lot of shares in some particular company. You might as well have just written “GameStop is a publicly traded US company” and one would deduce that BlackRock owns a lot of shares in it.
- the_local_host 6y ago
  BlackRock had 13% of GameStop. That's more consistent with taking a real stake than just happening to own it along with a piece of everything else. https://www.reuters.com/article/us-blackrock-investment-gamestop/blackrock-may-have-raked-in-2-4-billion-on-gamestops-retail-driven-stock-frenzy-idINKBN29W22T https://www.reuters.com/article/us-blackrock-investment-game...
  - deleted 6y ago
    [deleted]
  - MichaelDickens 6y ago
    BlackRock owns a similar % of the entire market, so this isn't too surprising. BlackRock has about $9 trillion AUM, and the global stock market is worth around $100 trillion. (Not all of that $9 trillion is stocks, but BlackRock still owns a notable percentage of the total stock market.)
- m4eta 6y ago
  Linkedin is your friend. A lot of top people came from Blackrock. lol.
avs733 6y ago
not having a RH account, can you trade there on leverage? I imagine if a huge number of retail traders are ending up leveraged to high hell, RH may have ended up in an uncanny financial position because of this.
- tfehring 6y ago
  You can (and people frequently do) trade options on RH, which are inherently leveraged. But RH is just a broker - it’s not on the other side of the trades itself.
  - avs733 6y ago
    ah okay. I wasn't sure what services RH offered and didn't. The amount of meme-ery around them had me wondering if they had decided to go beyond being a broker to try and extract more money from users like they do by selling access to their order flow.
- wfhpw 6y ago
  Then they can enact a moritorium on leverage buys to protect themselves. They have no liability for clients who are buying without leverage.
- dv_dt 6y ago
  I think the biggest thing RH offered that they may have been justified in curtailing is fractional stock buys and buys on margin. But to stop trading on buys outright is very strange.
tfehring 6y ago
BlackRock isn’t a hedge fund, it’s (primarily) an index provider and just holds stocks including GME on behalf of clients who invest in wide swaths of the market at once. Most of the profit has probably gone to passive investors who own a little bit of GME as part of a diversified portfolio. (I’m pretty sure that group includes me but I’m not even 100% certain of that.)
Kranar 6y ago
There is a saying that if you're not paying for a product, you are the product. Robinhood's real customer, the paying customer isn't the users of its app, which they offer out for free. It's actual paying customers are HFT firms, and specifically Citadel, the same Citadel that on Monday bailed out Melvin Capital with a 3 billion dollar loan. Wouldn't surprise me one bit to find out Citadel called up Robinhood and said either shut this GME trading down or they're pulling the plug.
- Aunche 6y ago
  Melvin Capital closed out their short positions, so what exactly does Citadel stand to gain here?
  - Kranar 6y ago
    I do admit to speculating here, but I am speculating that Melvin Capital did not close out their short position. Their claim to CNBC leaves a lot of room for interpretation, misunderstanding, and it's an informal statement. We won't know what Melvin Capital did until they submit their next 13F filing.

by Aunche 6y ago

dan-robertson 6y ago

BlackRock hold everything. It doesn’t really mean anything to say that they hold a lot of shares in some particular company. You might as well have just written “GameStop is a publicly traded US company” and one would deduce that BlackRock owns a lot of shares in it.

the_local_host 6y ago
BlackRock had 13% of GameStop. That's more consistent with taking a real stake than just happening to own it along with a piece of everything else. https://www.reuters.com/article/us-blackrock-investment-gamestop/blackrock-may-have-raked-in-2-4-billion-on-gamestops-retail-driven-stock-frenzy-idINKBN29W22T https://www.reuters.com/article/us-blackrock-investment-game...
- deleted 6y ago
  [deleted]
- MichaelDickens 6y ago
  BlackRock owns a similar % of the entire market, so this isn't too surprising. BlackRock has about $9 trillion AUM, and the global stock market is worth around $100 trillion. (Not all of that $9 trillion is stocks, but BlackRock still owns a notable percentage of the total stock market.)
m4eta 6y ago
Linkedin is your friend. A lot of top people came from Blackrock. lol.

avs733 6y ago

not having a RH account, can you trade there on leverage? I imagine if a huge number of retail traders are ending up leveraged to high hell, RH may have ended up in an uncanny financial position because of this.

tfehring 6y ago
You can (and people frequently do) trade options on RH, which are inherently leveraged. But RH is just a broker - it’s not on the other side of the trades itself.
- avs733 6y ago
  ah okay. I wasn't sure what services RH offered and didn't. The amount of meme-ery around them had me wondering if they had decided to go beyond being a broker to try and extract more money from users like they do by selling access to their order flow.
wfhpw 6y ago
Then they can enact a moritorium on leverage buys to protect themselves. They have no liability for clients who are buying without leverage.
dv_dt 6y ago
I think the biggest thing RH offered that they may have been justified in curtailing is fractional stock buys and buys on margin. But to stop trading on buys outright is very strange.

tfehring 6y ago

BlackRock isn’t a hedge fund, it’s (primarily) an index provider and just holds stocks including GME on behalf of clients who invest in wide swaths of the market at once. Most of the profit has probably gone to passive investors who own a little bit of GME as part of a diversified portfolio. (I’m pretty sure that group includes me but I’m not even 100% certain of that.)

Kranar 6y ago

There is a saying that if you're not paying for a product, you are the product. Robinhood's real customer, the paying customer isn't the users of its app, which they offer out for free. It's actual paying customers are HFT firms, and specifically Citadel, the same Citadel that on Monday bailed out Melvin Capital with a 3 billion dollar loan. Wouldn't surprise me one bit to find out Citadel called up Robinhood and said either shut this GME trading down or they're pulling the plug.

Aunche 6y ago
Melvin Capital closed out their short positions, so what exactly does Citadel stand to gain here?
- Kranar 6y ago
  I do admit to speculating here, but I am speculating that Melvin Capital did not close out their short position. Their claim to CNBC leaves a lot of room for interpretation, misunderstanding, and it's an informal statement. We won't know what Melvin Capital did until they submit their next 13F filing.