Het Wolfstreet report bespreekt de short squeeze die tijdens de GameStop-hysterie een groot hedgefonds sloopte. Uitgevoerd door aanvallen van kleine beleggers, die het plafond uit de markt verwijderden, en daarmee de short positie van het hedgefund ondergroeven.

Volledige transcriptie van dit Wolfstreet report

It has finally blown into the open for all to see. The stock market has been broken for a while, for a long time, actually. The idea that the stock market is where price discovery takes place on a rational transparent basis, with ups and downs, and some amount of chaos, but free of rampant manipulations – that idea has now totally imploded.

What has been visible for a long time but now blew into the open is just how manipulated the market is, by all sides, how overleveraged the big players are because the Fed encouraged them to, and how enormous the risks are, and how crazy the trading strategies are.

And the stock market soared to record out-of-whack valuations, in a terrible economy where at least 10 million people have lost their jobs and are still out of work, and where entire industries have gotten crushed. The whole thing is propped up by stimulus and bailout payments to consumers and companies alike.

And then came a new force – or rather the force wasn’t new, but the magnitude was: regular folks ganging together in the social media, particularly on Reddit’s WallStreetBets, and they were deeply cynical about the fake markets and they saw an opportunity, and they conspired to make a ton of money and push some hedge funds over the cliff, by buying long the most shorted stocks, in other words, they conspired to engineer a historic short-squeeze.

This coordinated buying by the crowd on WallStreetBets, of a handful of small most-shorted stocks, drove up their prices sometimes by 100% or more in a day, which pushed the hedge funds that were short these stocks to the brink. And it pushed online broker Robinhood to the brink. And it revealed for all to see just how broken the stock market has been.

Verder lezen van deze transscriptie kan hier, op Wolfstreet.

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Duur: 18:27 min.
Publicatie 31 januari

The historic short squeeze, engineered by a bunch of deeply cynical small traders, exposed just how rigged the market has been.

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