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A hedge fund shorted a stock (Melvin), and some other hedge funds either bought or held the stock (Blackrock etc). Melvin lost that bet in, but  if you think they lost 70 gigajillion or whatever. They would have closed out their position as soon as it moved 10%ish out of their risk parameter. The stock market is a giant prediction market, and making bets against each other is what financial institutions do. There's nothing particularly unique about this situation, except that someone conned people into a pump&dump through reddit and youtube instead of on the phone or via email. The whole "screw Wall Street by going all in on one side of a bet" turned real fast into people pushing an obviously fraudulent narrative that the stock price was going to hit $5000 dollars, and what it didn't it's due to made-up terms like "short ladder attacks". There's a whole industry of people baiting people into pump&dumps and it's sad because instead of just mildly inconveniencing their friends with MLM pitches, this kind of fraud has the potential to nullify someones life savings.This is the kind of bullshit this incident will spawn more of: 
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Feb 4, 2021 00:27
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| # ¿ May 15, 2024 17:01 |
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