What we’re reading (1/29)
More on GameStop:
“Robinhood CEO Speaks To Cuomo After GameStop Stock Chaos” (CNN). Vlad Tenev goes on CNN and offers an explanation for why the platform restricted buying in GME shares yesterday, but allowed sell orders, and discussed the apparent conflict of interest arising from the fact that major investors in and order-flow clients of Robinbood (e.g., Citadel) or their affiliates were short the stock.
“Why Robinhood Had To Risk Infuriating Its Customers” (DealBook). “Robinhood had to raise $1 billion from investors yesterday to help it cover cash demands during the week’s trading frenzy, while traders and lawmakers sharply criticized the online broker for halting some trading in Reddit-touted stocks. In short: The consequences of the mania in GameStop, AMC and other stocks are becoming more concrete — and, in Robinhood’s case, more serious.”
“70.87 Billion Reasons Why The Retail Brokers Just Betrayed Their Customers” (ZeroHedge). “[T]he best outcome - for Melvin's forced owners - would be to simply stop the firehose of liquidity whichever way possible, and after a few back door phone calls, which we hope to learn all about during the upcoming Congressional hearings, that's precisely what happened. But Citadel and SAC Point72 were not the only ones on the firing line. As Faber [of CNBC] also said earlier, ‘any number of large of large hedge funds have suffered significantly.’ How much? According to financial data analytics firm Ortex, short-sellers - mostly hedge funds - are sitting on estimated losses of $70.87 billion from their short positions in U.S. companies just in 2021 alone!”
“Suck It, Wall Street” (TK News by Matt Taibbi). “This is where society will ultimately come down, of course, uniting to denounce $GME as financial Trumpism, even though it actually comes closer to being an updated and superior version of Occupy Wall Street. It’s likely not any evil manipulation scheme, but ordinary people acting — out of self-interest, but also out of sheer enthusiasm for one of the best reasons to do just about anything, because you can — on a few simple, powerful observations. They’ve seen first that our markets are basically fake, set up to artificially accelerate the wealth divide, and not in their favor. Secondly they see that the stock market, like the ballot box, remains one of the only places where sheer numbers still matter more than capital or connections. And they’re piling on, and it’s delicious, not so much because they’re right, but because the people running for cover are so wrong, and still can’t admit it.”
“The History Of WallStreetBets, the Reddit Group That Upended The Stock Market With A Campaign To Boost GameStop” (Business Insider). “For many, the GameStop rally might be the first time they've heard of the community, but r/wallstreetbets is actually a relatively old subreddit with deep ties to internet culture…[t]he language used on posts in the community can be crude and boorish…[b]ut if you can move past the crass outer shell, you can find an almost-coherent community of like-minded individuals who want to flip off the hedge fund managers and make money for the little guy.”
