January 28, 2021
On Gamestop
So for those who may have missed it GamestopGate (seriously, does it HAVE a name?) is where a bunch of Redditards, on a lark, decided to use their $600.00 dollar stimulus checks to white-knight for the dying retail chain that meant so much to them in their youth. The firm was being targeted by short sellers whose business plan is to kick struggling businesses in the nuts. The Redditatrds in question, thousands and thousands of them, did the exact mirror image of what Melvin Capital was doing to Gamestop, and boosted its stock from 3 dollars to over 300. The result is that Melvin Capital is loosing their shirts, having borrowed money with which to invest in Gamestop stock once they wrecked its price.
The problem as I see it is that people whose retirement funds are locked up in Melvin Capital are getting burnt by this too. This is sad.
It's also dangerous.
The outrage by the Wall Street types is shining a light on the fact that they are really angry that someone from outside the their clique doing what they do all the time, just without sneakiness or subtlety. And that is a genuine danger because it brings into stark relief how fake the current Wall Street situation is, and that brings to mind...Tulips.
Oh. Oh no.
And that's not good for ANYBODY.
A rock solid argument can be made that this is unacceptable. But if that's the case, then it has to be unacceptable for everybody including the people who were perfectly content to profit mightily from doing the exact same thing to the less powerful and now whine like stuck pigs that what they did to the peasants is now being done to T...THEM!
The establishment is gathering the wagons around the predatory short sellers, freezing trading on this and other stocks that are getting relief from the short sellers. as Glenn Reynolds notes in the Post....
Meanwhile, regulators huffed and puffed, and CNBC was filled with industry bigshots arguing that this sort of thing shouldn’t be allowed — although, as critics noted, the Reddit mob was just doing to the short-sellers what Wall Street insiders do all the time to retail investors.The Biden administration, meanwhile, weighed in with the sort of response we’ve come to expect from the Really Smart Peopleâ„¢. Asked if the White House was concerned about the stock market and the movement of GameStop stock, Press Secretary Jen Psaki responded: "Well, I’m also happy to repeat that we have the first female Treasury secretary.â€
Uh.
'Kaay.
That we are in fact living in Clown World is demonstrated by the fact that the pithiest and most cogent take is from...Glenn Greenwald.
And that...is why we're here.
Posted by: The Brickmuppet at
11:36 PM
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I'm unsure if there's relevant retirement funds locked up in Melvin Capital. Usually there's "qualified investor" requirements to get put into the LP funding vehicle and one of those requirements tends to be "can survive this LP going to zero"
Posted by: Really Bored at Fri Jan 29 11:02:03 2021 (cp/J1)
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