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by jakelazaroff 1961 days ago
Why is now when we start caring about that, though? I don’t think the current position of GME is a reasonable one, but neither is the situation in which 140% of its shares have been shorted. And it’s not just academic: that makes it difficult for the business to grow. The hedge funds are literally trying to suffocate it into bankruptcy.

And yet no one raised the alarm then. No one worried about retail investors with a long position in GME, or the workers who could be laid off. The truth is that almost no one at all cared about the market being detached from reality or the ordinary people left holding the bag when the hedge funds were set to profit. But now that they’re losing, suddenly everyone is beside themselves with worry.
1 comments
tom_mellior 1961 days ago
> now that they [=hedge funds]’re losing

Are they, though? Sure, some of them lost. But there are others that will only get stronger if some competitors are eliminated (a point also made by https://news.ycombinator.com/item?id=25957142). And even the ones that lost big so far can get back into the frenzy. Buying on the way up... or shorting near the top.

Here is my take on the "irony" of the situation: Hedge funds can make money off of stocks they believe to be overvalued. So the WSB activists handed them... a stock that everyone knows to be MASSIVELY overvalued. Yeah, that will show them.

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jakelazaroff 1961 days ago
Right, it's pretty easy to make the case that a lot of the winners are already big players on Wall Street. The biggest example seems to be Citadel, which got to play both sides by trading on Robinhood's order flow and also investing in Melvin at a steep discount.

My point remains, though: where was the concern before the r/wallstreetbets saga? GME was at ~$4 last summer and made it up to ~$20 by the end of last year. If the hedge funds were right and it was massively overvalued, where was the concern for retail investors taking out long positions back then? And conversely, if the hedge funds were wrong, where was the concern for the GameStop workers?

We can go back and forth about the winners and losers, but it's pretty clear that no one really cared about the "ordinary people" before some hedge funds got caught with their pants down.

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