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Re:u/DeepFuckingValue and the GameStop Reddit mania by SpicyLemonZest on Friday January 29, 2021 @06:05PM (#25963998)
The theory I've seen is that there could be hidden systemic risks here. If GME tanks suddenly, there's some possibility that traders bailing out of their trades will take down Robinhood (who doesn't seem to be very healthy right now), and a major broker collapsing is never gonna be great for the market.

I share your skepticism that it would actually happen this way, but it seems at least somewhat plausible.

Re:u/DeepFuckingValue and the GameStop Reddit mania by girvo on Friday January 29, 2021 @06:40PM (#25964348)
Robinhood are tiny on the brokerage stage. Important to retail, barely matter otherwise. That’s my understanding at least
Re:u/DeepFuckingValue and the GameStop Reddit mania by SpicyLemonZest on Friday January 29, 2021 @09:47PM (#25965518)
That seems consistent with what I've read recently. Good news.
Re:u/DeepFuckingValue and the GameStop Reddit mania by lwigo on Friday January 29, 2021 @07:27PM (#25964679)
It's got nothing to do with Robinhood. If a hedge decides to cover the short so they don't have to admit defeat and go bankrupt, then the entire market goes down because they'll end up selling thousands of unrelated shares for their cover.
Re:u/DeepFuckingValue and the GameStop Reddit mania by SpicyLemonZest on Friday January 29, 2021 @08:56PM (#25965241)
You've fallen victim to some common misinformation that's spreading. Multiple hedge funds have already been able to cover their shorts, and there's not much reason to believe this will change.
Re:u/DeepFuckingValue and the GameStop Reddit mania by lwigo on Saturday January 30, 2021 @10:37AM (#25969898)
Not an endorsement but this was retweeted by Kai Ryssdal: https://twitter.com/TheStalwart/status/1355531873896824834