Hedge Fund Billionaires Are Fear Mongering that Small Reddit Investors will Crash the Market

[berni_mccoy]

In case you aren't up to speed on the Reddit WSB forum, here's a synopsis:

Hedge Funds over shorted select companies because they believed those companies would collapse. Over shorting is borrowing more shares than exist on the market on the stock. If the stock goes up, the shorts can't honor their contracts to return the shares and must buy back at FMV to cover their position. If no one sells the stock, they go bankrupt.

Hedge Funds have over shorted companies into oblivion, which as a by-product ruins people's lives. A handful of investors believe that GameStop was undervalued and started buying up the shares a couple of years ago.

Fast-forward to January 2021: GameStop performed decently over the holiday season thanks to two new console platforms. Hedge Fund Managers are losing billionaires' billions because they royally fucked up. Millions of people on the WallStreetBets forum saw this happen in real time and joined in buying up over-shorted stocks like BB and AMC whose representative companies still show some value and potential for value.

It is now a movement. And the Billionaire class is very unhappy. So unhappy, they are now fear mongering that the merket will crash. Well if that is possible, then the market was truly broken from the get go. But we all knew that. The system has been unfair for a long time and now that people have figured out how to beat them at their own game, they are willing to risk prison time for it. Robinhood, the online trading app that allows people to trade for free, started blocking trades on any stocks mentioned in the WSB Reddit forum and they actually sold peoples positions in these stocks with the excuse of "Protecting them". Only problem is they cost those people hundreds of thousands of dollars and are now being both sued in federal court and investigated by the SEC.

Why did Robinhood do this? They are backed by the same Capital Investment firm that bailed out one of the hardest hit Hedge Funds, Melvin Capital.

Today, they are all over the news proclaiming an imminent crash if the government doesn't stop these individual investors who are playing the the very rules the market gives them. It's an admission that the markets are completely broken and are only used to maintain and increase the wealth of the ultra rich.

In Full Disclosure, I am a member of the WSB Reddit forum and I own positions in these over shorted stocks.

[soothsayer]

1. Karens.

[Lars39]

2. Bottom line...they made rich people cry.*

Brent Terhune...

[mr_lebowski]

6. Oh, man ... that's freaking awesome ...

Love that guy ...

[Celerity]

9. +10000000000000000

[PufPuf23]

21. That is really cute !!!

alas the financial markets are a fraud.

[theaocp]

3. I believe strong regulations are needed, yet the donor class will

Continue to cry. It’s all these fuckers seem to be able to reliably do ... cry. Fucking babies.

[muntrv]

4. It's only class warfare when we fight back.

[RainCaster]

5. Well said Berni

This will take time to get properly exposed.

The hedgies have a clear trail of greed and corruption that only proves what Senator Warren has been saying for years. This is a very and obvious example of the folly of the games that the "professionals" play. I hope a major redo of the market will occur from this. It never happened after the '08 crash, it needs to happen now.

[Catcar]

7. Redistribution of wealth baby! Hope the greedy bloviated cry babies lose it all.

[sop]

8. Where can I get my own "Emotional Support Beer" koozie?

[ecstatic]

10. So what's next?

Many of the major stocks took a price hit last Friday. Are the billionaires going to take a temporary loss in order to discourage or squeeze retail investors out?

[berni_mccoy]

15. They took a hit because the Hedge funds had to liquidate shares in other stocks to cover

Their positions. The stocks like GME and AMC remain over shorted by these guys and others. The only problem is most who own a stake are not releasing them. So they will have to continue paying interest or get out. It will push these stocks even higher.

[Voltaire2]

17. It is now a spectacle sport.

Billionaires blood in the arena.

[Miguelito Loveless]

11. It's all fun and games

until the wage slaves make their own financial nukes.

[kickitup]

12. Does this fear mongering mean Melvin Capital didn't actually cover their shorts?

Surely they wouldn't lie!

[berni_mccoy]

13. They lost 53% of their wealth and have been bailed out by billionaire investors

They now have $8 billion to spend, er, I mean lose.

[Voltaire2]

16. It seems they did and took new short positions.

They are now in over 20B and are betting that they can outlast the redditor holdouts. As most of the redditors have very little money invested in GME while Melvin now has 20B on the line, I’m guessing this is not going to work either.

[Dawson Leery]

14. The funds I invest in are mutual/bond/index.

The hedge funds are one of the greatest scams of finance. They get paid regardless of performance.
The truth is the commoners beat them at their own game.

[Volaris]

19. Yep their sadz is all about they got out-hustled by a buncha pro-am kids in a subreddit thread.

Fuck em lol.

And not for nothin, but if THIS is enough to crash the market, they need to loan trump their lawyer for the impeachment trial, cause it was OBVIOUSLY stolen..

[Hav]

18. One hedge fund lost billons

other hedge funds and big investors on the other side made billons and many retail investors following this trend late will lose much of their money.

This is a topic that has attracted much disinformation and conspiracy theories when other logical explanations are available because many retail investors who are or will losing out in the end need an excuse.

[IronLionZion]

20. With Dems in control of Congress, it's time for some better regulations of hedge funds

although we have bigger problems to deal with first. I wouldn't put it past the hedge funds to deliberately crash the market. We know they are targeting pandemic weakened retailers to kill.

[muriel_volestrangler]

22. Since you're a WSB member and have acted on info from there, can you answer a couple of questions?

Did the publicly-available data about the short positions in GME include the prices, quantities and dates at which the hedge funds started their short positions, or was it just the total proportion of the issued shares that someone had sold short that was available (that's the only figure I've seen quoted in news articles so far - up to 130% or 140%, I believe, which was explained as "A lends it to B, who sells it to C, who lends it to D, who sells it; so B and D have both shorted the same share, which would appear as 200%".

When did WSB say "the shorters have gone too far" with GameStop? The price declined fairly steadily from about 30 in Feb 2016 to 4 by Jan 2020. Did they attribute that to hedge funds shorting it, or was that seen as an actual fair evaluation of the stock's value?

[berni_mccoy]

23. The amount of short positions is publicly available.

And which funds have which positions can be determined through some research, which members of the forum have done.

The information is there and hedge funds are required to make financial disclosures.

The movement started because a few of the investors saw value in the company despite the shorts and they’ve been investing in it over the last 2-3 years.

[muriel_volestrangler]

24. Thanks (nt)