Wall Street Establishment vs Wall Street Bet
The battle between Wall Street Establishment vs Wall Street Bet has already produced a loser. Melvin Capital has reportedly liquidated their fund and sold out of all their short Position of The GameStop Corp. This move they were forced to take after wallstreetbet rallied behind GameStop Stock. This caused the stock to more than doubled this week alone to nearly $150 apiece, driving its January gains to 685%.
The price of GameStop ($GME) as of this writing is currently $354. It opened at $352 this morning.
Melvin Capital Bankrupt?
Melvin Capital is currently in dire straits. The hedge fund has lost billions of dollars. Citadel and Point72 have transferred over close to 3 billion to Melvin Capital for it to stay afloat. According to CNBC, the rumors that the company is filing for bankruptcy are false. Melvin Capital selling out of their short position means that they have incurred huge losses and now trying to buy back the GameStop share before it goes up more. Let’s see how the company navigate the coming days and week. If they are not bankrupt now, one wrong move could be the final nail in the coffin.
Why Wall Street Bet is Going after Melvin Capital and Short Sellers?
Simple answer. It’s to send a message. Retail investors want Wall Street Establishment to know that they can mobilize just like them and manipulate the market. It’s also about the greedy Wall Street hedge funds that short stocks of companies already struggling and forcing the company stock even lower. For too long has Wall Street been the only ones that could manipulate the market. Plus, they have done it to the detriment of .many retail investors. This is Reddit, Robinhood, and retail investors striking back.
Wall Street Bet Good for the Financial Markets?
There is already a lot of backlash from the Wall Street establishment. Exects are complaining about the wallstreetbet, and retail investors move against Malvin Capital and short investors. Calling it market manipulation, insider trading, you know all the things they are guilty of doing daily. However, as one Twitter user pointed out, they are all hypocrites.
Charles V Payne Tweet: ” The same financial media that allowed shorts free reign to bash stocks to hell for years are now calling folks with $1,000 in a #RobinHood account a cartel.
Trying to elicit sympathy for folks who made billion crushing stocks and pay the lowest taxes rates isn’t going to work.”
The Markets need Democracy.
What’s happening is a good thing. It’s the natural progression to democratizing the financial markets using social media and fintech apps, and software like Robinhood. The Markets need Democracy. Trillions of dollars pass through the financial markets daily with very little oversight or a say from the millions of citizens in America. All this while market decisions have real implications for everyday citizens if anything should go wrong, e.g., 2008 Financial Crisis.
The average person getting a chance to profit from the market is a good thing. This can allow millennials to reward companies that are planning for a better future. With more voices in the market, it will open it up to more transparency. And Hopefully, Chart a future that is good for all involved.
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