The Big Squeeze
This week retail investors and entrenched Wall Street hedge funds went to battle against one another.
A growing Reddit community, r/wallstreetbets (WSB), put their 💎✋s [read: diamond hands] where their mouths were and collectively gathered to squeeze the short positions of large hedge funds with billions in funding like Melvin Capital and Citron Research.
The most famous position being a teetering brick and mortar video game company, GameStop (GME), which is often derided for its suboptimal buyback program. Originally proposed by u/DeepFuckingValue on the subreddit, WSB rallied behind the squeeze, gaining national attention in the process from the likes of wall street speculators like Jim Cramer and Capitol Hill legislators like AOC.
In the process, u/DeepFuckingValue turned a gamble into a 4,420.98% gain.
Others like u/Stammbomb were able to help their families with the gains made from taking on Wall Street.
The saga continues to unravel, but trading platforms like Robinhood have come under fire with accusations of market manipulation for halting buys of “meme stocks” like AMC, GME, and Nokia (NOK) and only allowing retail traders to sell their positions.
All told, it’s an interesting case study on the power of a growing internet community of 4.7 million self-titled “degenerates” who drove Melvin Capital to call in a nearly $3 billion lifeline.
Source: Social Media Today
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