When Icahn does it he's a genius. When the street is challenged by a new distributed and crowd sourced hedge fund coordinated on an online forum they're fools.

I personally don't care if more people maintain this belief - but more and more funds are definitely starting to pay attention.

You could do this once a month - pick a heavily shorted low/mid-cap company and squeeze the crap out of it and reap what PE firms and institutions have sown

I fully expect the establishment to pressure the SEC to crack down because it's a new challenge and they're losing.

Hedge funds earned their name by their ability to hedge. Professional risk takers can balance their portfolio by placing multiple bets where they can afford a few of them coming up empty because they only need one to hit big. A keyboard commando betting their 401k on one stock is running a much bigger risk.

Given how hard Melvin Capital is going down right now, it doesn’t seem like they are all that good at the hedging bit. But sure, let’s pretend the big guys are insanely wise and all knowing and never play dirty.

Melvin Capital lost Billions last week alone. They needed to get bailed. You have been sold the narrative by the same people who screwed you in 2008. The bubble is the consequence of Hedge Funds getting greedy and repeatedly screwing a "dead company", by overshorting the shares.

Don't take my word for it, take Louis Rossmann's, somebody known to stand for the little guy.

https://www.youtube.com/watch?v=4EUbJcGoYQ4

That video was a great explanation, thank you

Surely if it's obviously a bubble they can bet on that bubble bursting and come through the other side on top? Is it just a matter of rules around capitalisation? Surely it would be good business for them to go get that capitalisation?

I wonder if there is a systemic risk behind this.

Kind of like, if one domino falls, then the rest will tumble.

https://www.youtube.com/watch?v=lMUtU0tOmNE (The Pyramid Scheme that Collapsed a Nation)

This is partially what happened in 2008. Hedgefunds overshorted the housing market and then everything went down.

Didn't hedgefunds "overlong" the housing market? They were borrowing on margin using housing debt as collateral, but the collateral turned out to be junk, so they got margin called when that collateral tanked (the CDOs), and banks with insufficient liquidity to cover the losses either collapsed or got bailed out.

Essentially the housing market bubble was people going long using worthless collateral.

My understanding is that while the market crashed, certain people capitalised on the bubble breaking and kept shorting until it was ran to the ground.

This is why I absolutely hate Wall Street bets and push back every time it’s brought up. The people usually winning there are people who work in finance and are pushing their stocks onto the unsuspecting folks who visit just for the memes. There is something suspicious about a sub where high ranking users often post there 100k robinhood accounts, and the SEC investing them every few months is proof I’m not the only one who thinks so.

well past 100k now, u/WSBgod, u/DeepFuckingValue, and others are showing plays worth millions of $

some of these accounts "Rose up from nothing" by investing an entire portfolio of 50+ thousand dollars into extremely risky options. Either this is suspect or I'm out of touch with the average joe's risk tolerance.

u/DeepFuckingValue gave his DD, did his analysis and figured out the play. The fact that the shorts shorted 140% of the shares is their fault and nothing to do with insider information, it is all public, except of course for the blatant market manipulation by the same hedge funds, the naked short selling, the ladder naked shortselling, controlling the narrative, all the things people with billions in capital can and will do.

It’s worth noting that u/WSBGod was a scam ran by a corrupt mod to sell investment courses, but so far DFV is legit (given the size of his initial play and the fact he’s gotten his money out I think he’s legit, anyway).

DFV is up what, to $11MM right now, on his $50k investment? That's fantastic returns, but it's also only possible by the generated hype, and result of the short sellers getting screwed.

with that said, if someone spent $225 on lottery, and won $50k, no-one would bat an eye.

you’re out of touch with the entire wsb scene. wsbgod/jarteks alt (the mod that used the sub to farm idiots into a scam/trading group) was a ruse used to hype the sub.

I don't thing anyone is suggesting that this will fix the systemic issues which plague the younger generations today. While this probably isn't going to cause much harm to Goldman Sachs you can be sure the people who'd been shorting gamestop weren't too happy about it and enough random and unorthodox trading will certainly keep day traders on their toes. I'm not about to go gambling with what little spare cash I've got, but I'm not going to discourage others from trolling wallstreet by doing it. It's their money to lose.

Have you seen the volume being traded? Retail investors cannot make moves like that. Other firms are in on the play and cannibalizing their own.

It's the greed of the fund managers that kept shorting this company that will be driving the price way up. They will eventually need to cover their shorts causing the spike. the money will be payed mostly by these greedy fat cats

This isn't getting rich through a greater fool theory. This isn't a pump-and-dump; it's a short squeeze. The only fool here is Melvin Capital which entered into some pretty foolish short positions and are suffering the price.

The only story here is that it is retail investors who are profiting off it rather than some other insider hedge fund.

this is the way