Reddit VS Melvin Capital
They showed us they don’t want us to think. That means they’re scared.
If you’ve heard the hullabaloo surrounding Reddit and Gamestop, you’ll know that a group of private citizens on Reddit got together to try their hand at coordinated stock buying. This is typically called a hedge fund.
The scandal started once they ruined a “real” hedge fund’s plan for the stock.
See, Melvin Capital had decided that Gamestop and AMC were only worth shorting. They had set up billions of dollars in planned transactions betting that the price of the stock would go down.
When this Reddit group caught wind of this trade and started buying stocks, the price rose, losing a large group of rich investors those billions. Note, this type of action-reaction is how the stock market works. It happens between hedge funds all the time.
The only difference here is that we, the people; the unwashed masses, were the ‘opposing hedge fund’ in this case.
Melvin Capital got mad, and weird things started happening. All of a sudden the Reddit group that organized this (effectively a non-conglomerate hedge fund made up of single buyers) was shut down. Discord forbade them from using its platform to communicate shortly…
