You all saw the headlines. Billionaire hedge funds lost oodles of money — billions of dollars — GameStop’s stock went through the roof last week. In short, these folks were betting the price would go down. The people decided to take the opposite bet. The subreddit chain WallStreetBets just played the same schemes these hedge fund fat cats have been playing for years and repurposed it. There’s nothing illegal about it. The little guys gathered en masse and drove the price of GameStop up. They also targeted AMC Theaters, Nokia, Blackberry, American Airlines, and other companies. If you watch "Billions," this is what the hedge funds do as well: meet up, target securities, and manipulate the market. The only exception is that the country bumpkin crowd, for lack of a better term, started to make money. This couldn’t be allowed. So, Robinhood, one of the many trading apps available, decided to just stop its users from buying more stock. There were others who did the same, but Robinhood has been selected as the face of this market fix. The company prevented users from buying more GameStop shares so the price would go down, allowing hedge funds to recover. Oh, and there was talk about suspending trading as well.
"We can do it, but you can’t." That’s the rule. Elon Musk, Sen. Ted Cruz, Rep. Alexandria Ocasio-Cortez, and Barstool Sport’s founder Dave Portnoy all voiced their support for the small investors, some of whom are in high school, with Portnoy dumping more than $1 million of his own money.
Still, with that artificial tweak, the stock cratered. It has cratered. People risk losing cash playing the stock market. That’s a given, but it’s an entirely different story when the elites decide to turn the spigot off.
Wall Street’s war on reddit and Robinhood isn’t about free markets or price transparency or longs vs. shorts or anything like that.
— Sean Davis (@seanmdav) January 29, 2021
Wall Street institutions have crushed retail shorts with impunity for decades, even and especially when the shorts were right. (1/x)
What’s happening right now is Wall Street realizing that retail investors, whom Wall Street mocks as nothing more than dumb commission factories for big brokerages, actually have some power that Wall Street believes it has a divine right to wield. That cannot be allowed. (2/x)
— Sean Davis (@seanmdav) January 29, 2021
The war on reddit and Robinhood is about putting retail investors in their place. Retail investors are not allowed to move markets. Only Wall Street institutions move markets. Retailers are not allowed to squeeze shorts. Only Wall Streeters are allowed to crush shorts. (3/x)
— Sean Davis (@seanmdav) January 29, 2021
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Wall Street, you see, is allowed to make money no matter what. That was the lesson of 2008. Who cares that it’s Wall Street who destroyed the housing market/economy by lying about the risk of their garbage mortgage derivatives? They were entitled to bailouts. (4/x)
— Sean Davis (@seanmdav) January 29, 2021
Sure, millions lost their jobs and countless people lost their homes. The bankers got paid...with your money. They got bailed out...with your money. Sure, you lost your savings and home. But that’s what you get for being a dumb rube instead of a New York City banker. (5/x)
— Sean Davis (@seanmdav) January 29, 2021
So don’t get conned by those claiming hedge funds are just trying to protect the markets and price transparency and efficiency and blah blah blah. This is a war between corrupt institutions and normal people, and the institutions simply will not allow the normals to win. (6/6)
— Sean Davis (@seanmdav) January 29, 2021
Sean Davis, The Federalist’s co-founder, had a good thread about this whole incident saying that it’s not really about short selling. The populist sentiment we saw this past week on Wall Street has its roots that go back to the 2008 financial crisis:
The war on reddit and Robinhood is about putting retail investors in their place. Retail investors are not allowed to move markets. Only Wall Street institutions move markets. Retailers are not allowed to squeeze shorts. Only Wall Streeters are allowed to crush shorts.
Wall Street, you see, is allowed to make money no matter what. That was the lesson of 2008. Who cares that it’s Wall Street who destroyed the housing market/economy by lying about the risk of their garbage mortgage derivatives? They were entitled to bailouts.
Sure, millions lost their jobs and countless people lost their homes. The bankers got paid...with your money. They got bailed out...with your money. Sure, you lost your savings and home. But that’s what you get for being a dumb rube instead of a New York City banker.
So don’t get conned by those claiming hedge funds are just trying to protect the markets and price transparency and efficiency and blah blah blah. This is a war between corrupt institutions and normal people, and the institutions simply will not allow the normals to win.
"This is a war between corrupt institutions and normal people." Amen, sir.
I have officially sold all my meme stocks. I lost 700k ish. Vlad and company stole it from me and should be in jail. pic.twitter.com/qXP1N1UFil
— Dave Portnoy (@stoolpresidente) February 2, 2021
It looks like Portnoy, who vowed to stay in as long as he could, finally had to tap out, losing some $700,000. This isn’t a "hate the rich or soak the rich" march. No. It’s about basic fairness. There will be a backlash when it’s appallingly clear that the rich set forth a fix to prevent others from making money. That has to change. In the meantime, this movement, populism by trading so to speak, isn’t going away. You can’t shut down the Reddit thread — that’ll only make this movement stronger. All I can say is good luck, fellas. Stick it to them.
If you're a financial, political, or media elite and you're still wondering what's behind GameStop, I can help: It's giving a bunch of young men the sense of community, camaraderie, purpose, and accomplishment that was taken away from them by people like you. Hope that helps.
— Shant Mesrobian (@ShantMM) February 1, 2021
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