I am sure many of you have already been following along with the Gamestop situation and a Reddit community called /r/WallStreetBets essentially giving a big middle finger to hedge funds and short-sellers who have been widely successful in injuring these Wall Street criminals.
It turns out a lot of the users in this sub use a popular trading app called Robinhood. The app's name seemed fitting as WSB traders were taking money from the rich, the kind of people who have been doing the same thing for decades without consequence.
Well, Robinhood has decided it doesn't want the "bad pr" and they have blocked Gamestop (GME) as well as a heap of other memestocks including AMC and NOK, citing that these stocks are too volatile. Robinhood in their blog post is spinning this as protecting investors on the platform, but we all know this goes deeper than that.
If there is one thing companies eventually learn, call it a hard lesson, you don't fuck with Reddit. If a subreddit of self-described retards and autists can wipe 30% off of a hedge fund's short-selling, what else can they do? Well, the wheels are already in motion for a class action lawsuit against Robinhood.
We already know how this is going to go. Robinhood will not permanently block these stocks, and they will do it long enough to the benefit of hedge funds like Marvin Capital and other investors in the Wall Street ecosystem, who will then attempt to recover their positions. This is Robinhood stealing from the poor and giving to the rich, and it's actually quite ironic.
The plan seems to have already been working, and the stock price went from over $400 to $126 helped in part by numerous trading platforms experiencing server issues and Robinhood deciding to block these stocks from being traded. Make no mistake that Marvin Capital thanks to the extra capital infusion of over $2 billion, used it to make money on the volatility.
Robert Reich said it best when he Tweeted the following:
Are we just going to pretend that Wall Street didn't fuck the entire economy in 2008? That their greed and malfeasance cost people their life savings, some people killed themselves over this, people lost their houses. And instead of regulating and jailing these crooks, we bailed them out and nothing changed. Not a single person was held accountable, a couple of financial institutions went out of business, but all that resulted in was power being redistributed to the institutions that didn't die.
All of a sudden a bunch of Redditors start moving the market and we are calling for the entire system to be changed? You can't have a free market and cry for help when that free-market flows from the bottom to the top. Given how much money has flowed from WSB alone and the added outside interest, Robinhood has potentially just lost itself a lot of money and damaged its brand credibility in the face of the millions of millennial investors who use the app (or recently discovered it).
And I am really enjoying seeing Elon Musk (who has experienced Tesla short-selling for years) creaming his pants over Reddit fucking the short-sellers.
