Bunch of hedge fund guys got caught with their dicks in the cookie jar, and the randos on Reddit are crushing them.
An epic fight.
Read a great quote in some article from one of the reddit guys: “We can be stupid longer than the shorts can be greedy”.
Ultimately, the shorts will win. This thing will collapse. In the mean time, this is hilarious. This is going to be talked about forever.
Look at this morning’s pre market.
PS: In case I seem too frothy in all this, a bunch of the reddit guys are going to get smoked by this. Most of them, actually. This bubble will burst and anyone who bought above $20 or so is going to lose big.
And while reddit thinks they are crushing Wall Street, they will end up crushing themselves. Right now, this is happening in part because the reddit guys are staying disciplined. Holding fast in mutual solidarity.
That can’t hold. Eventually the smart ones will start taking profits. Eventually profit taking will get the momentum. Once that happens, GME will collapse.
Right now, large numbers of individual investors (I’ll talk about how RobinHood is screwing them another time) are pumping up the stock with new money. They are all going to lose. And lose soon.
This truly is a battle between the stupid and the greedy.
I just heard something about official Wall Street moving to change the rules to shut down the amatuers. The one guy said the magic is not in the size of the Reddit crew’s investments but rather in the number of Reddit investors. I guess the Reddit folks have a stake of between $500 – $2500 individual amount invested.
This is really something. One way to look at it is through the lens of “cancel culture”. This is a social media rage mob acting in the financial markets.
But this one is different because this one costs the mob money.
So one of two things is true: They either don’t know this is going to cost them money, or they don’t care.
The ignorance will take care of itself. They’ll get their education soon enough.
The caring is the more interesting thing. Have we manufactured a mob that is convinced the system is rigged against them, but has enough money to piss it away?
There is another possibility. Maybe none of this has anything to do with Reddit at all. It may be that the short squeeze is just one set of Wall Street guys against another, and the Reddit guys don’t matter.
Robinhood has restricted GME trades to “close position” only, and increased margin requirements.
we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities.