Reddit $treet
What the hell happened today??
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Well, in short (pun$) there was a populus surge of short selling. Rather, a large group of people bought against a group of short sellers. It messed stuff up for some finance guys.
What is short selling?
It’s borrowing. Investors “borrow” a stock and sell it on the market. They then purchase it when it goes down in value. Groups of investors do this to drive the value of certain stocks down… like Game Stop (GME). The only way investors make money is if the stock goes down. If it rises… you borrowed it … so now you owe a shit ton of money.
Imagine thinking a stock priced at $50/share is going to drop. I borrow 1000 shares from a broker and sell them to the market.
Then when stock comes down to $2.00/share, I make 48,000 bones when I buy it back. But if that shit goes up to $500… I OWE half a million.
Simplified explanation, but you can see that this is a super risky thing to do, and most folks will get in on the scheme to make money. People don’t usually bet against Big Hedge Fund when they do this, because they are buying stocks that are thought to be dying anyway.
Ultimately, it’s a scummy thing to do. It helps no one (except you), creates no new value to the world, and if you’ve ever seen Hook you might call these guys Peter Panning to some degree (minus the M & As).
GameStop has been flailing for a while until this year, when they signed a deal with Microsoft. The gaming industry is going under massive changes, but that’s another story…not altogether irrelevant. People are fucking tired of the cost of living going up. Games are getting more and more expensive with in-app purchases. You really have to pay-to-play. Not fun.
Today, thousands of Redditors stuck Melvin Capital with billions of dollars in a short sale. Melvin Capital took huge short positions on Game Stop (GME), Driving the price per share down. They were certain GME would go down, so this incentivized traders to stop investing. It’s basically Wall Street gambling. It all started earlier in 2020, a Reddit user (/r/wallstreetbets) started a discussion about how ~ 84% of all GME was in a short sale. So, they started planning to fuck these short sellers up.
Today, the plan was executed with tons of small-time noob investors from Reddit buying the stock. New apps like Robinhood are perfect for the small-time, new investors. They make it super easy to trade like a pro. The Reddit community realized that they could all trade together to push the stock up collectively and make a ton of money, ultimately screwing over wall street jerk bags.
GME went up ~1100% and Melvin Capital felt a 2.75 Billion dollar LOSS.
This is exactly what Robinhood was made for...I mean the NAME alone is perfection. Stealing from the rich to feed the poor? You can’t make this shit up. Unfortunately, big shots in the finance community are losing their minds. Crazy Jim Cramer is calling this “collusion” and other big wigs have even suggested that maybe “foreign powers” might be at work trying to make “chaos of our markets”.
It’s kind of hilarious. The elite are pissed at the Common Man for doing exactly what they’ve been doing forever. They’re big mad because the entire stock market was their inside joke. Now that we’re all in on it, at their expense, it ain’t so funny.
Some are calling today the birth of Meme Stocks, or stocks that increase and decrease in valuation as a joke… but wait, isn’t that all stocks?
What’s next for the Merry Band of Redditors? Nokia? AMC? How are they going to keep this secret from our Wall street overlords?
Majority of Redditors in on this little scheme only made a few thousand dollars at most, but Wall Street is ready to shut it down. When have you ever heard of Wall street calling for MORE regulation?
There is a literal transfer of wealth going down.
Reddit did more in one day to tear down the 1% than Occupy Wall Street has done since its inception (although, now Occupy is on Reddit).
This is absolutely terrifying for what’s left of the Middle Class. All of our retirement funds are literally sitting on a house of stocks, but the foundation has been shooketh. We’ve been working horrid jobs, building our little nest eggs, paying off debt… and here comes the Reddit Meme Stock Monster to show how easy it is to crush the fucked up system we’ve built our lives around.
This is modern-day class warfare. The Battle of GameStop has been claimed by the Plebs for now with billionaire casualties at Melvin Capital. The Middle Class is going to put their tail behind their legs and stay put, but this is far from over. We haven’t even started talking about crypto yet - but the elite is hedging, of course. Hold on to your 401ks, it’s about to get wild.
Your move, Elite.