This is speaking out of both sides of your mouth. I bet you’re in the camp of people who are screaming they’ve been cheated by brokers and the free market is being limited, while also condemning Melvin for utilizing the free market. GameStop has a terrible business model, hasn’t updated it, and were going out of business. Shorting that company is not unreasonable. Did hedge funds do it excessively? Yes. You shouldn’t be that over leveraged. But it doesn’t change the fact that GME fundamentals were/are terrible and shorting it was a prudent move disregarding that some hedge funds “yolo’d” it the wrong way.
There are a bunch of “investors” that are about to realize they’ve got a cost basis valuation of 15 billion dollars in a company worth a few hundred million tops and they’re about to be very upset.
I’m not trying to defend hedge funds here. They do shady stuff and get away with it. It’s great that they get called out on this ridiculous, isolated,terrible position. The problem is people are already obsessed with what WSB’s next target is going to be. The foundation of what the stock market is built on is changing; it no longer matters what a company is actually worth. Just what Reddit says they can get the price to. This is going to create a ripple effect that ultimately pulls a lot of money out of the market which is bad for everyone.
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