A lot of DMs asking me what's going on with the market. Gonn..
🕑 Added 2021-01-29 17:02:52 +0000 UTC
A lot of DMs asking me what's going on with the market. Gonna preface this with I am not a financial advisor if that wasn't obvious I just have a broad interest in a lot of things including the stock market.
The very simple explanation is that a large hedge fund (Melvin Capital) has been betting that GameStop is going to go bankrupt by short selling their stock. This is the process of borrowing a stock from a stock broker and selling it with the intention of repaying it back at a later date + a bit of interest.
It's a very risky move because the potential loss is unlimited depending on the stock price. A bunch of people mainly starting on /r/wallstreetbets noticed how the amount of shares borrowed to short was more than the entire amount of shares publicly available. Yes it can happen because you can borrow the same share more than once. Yes it's stupid.
So basically Melvin Capital probably started shorting at most like when the stock was $16 or so but with the stock being whacky high right now they're going to have to buy back at extremely high prices. If the prices continue to stay this high they'll experience severe loss possibly to the point of insolvency.
So yeah basically a bunch of little guys banded together to tell the rich guys to go fuck off. Lots of whacky shit happening like Clearing Houses telling brokers to fuck off and not sell anymore GME and it all gets extra conspiracy theoried when you add to the fact that Citadel, a large market maker, has a finger in most of the assholes that seem to be conspiring to help the rich guys.
Where do I fit in? Hedge funds fucking suck. Fuck them. I mean look at the CNBC Leon Cooperman interview where he basically said the poors should just go fucking die. Also fuck the shenanigans they're pulling to try and pull Melvins ass out of the fire. Take your fucking losses from your risky ass bet.
