It has been very entertaining to follow what has been happening with Gamestop (GME) saga. Really worth purchasing a couple of stonks in itself, if you ask me — but this is not financial advice, I’m not a financial guru or professional of any kind. Still, after following the numerous Reddit discussion threads around the subject, the interesting fact seems to be that the majority of the so-called professionals seem to miss much of the major parts of the story. And what is even more curious is the silence among “investigate journalism” — to the level that makes one really wonder if there is that form of journalism anymore, or was it killed by click-bait journalism a long time ago.
What am I talking about? In short (bun intended), the Reddit hivemind has produced some very plausible theories about prominent Wallstreet companies participating in massive fraudulent shorting strategies that play against retail investors in such a way that these shorters are guaranteed mathematically to win. That is, until one day they got too greedy (like Billions of dollars greedy) and forgot that there are counterplays to shorting — especially to naked shorting.
The latest “conspiracy theory” goes something like this: these companies get the statistical data of what retail investors are doing and use this to bet against retail investors. And not only that, but they do it with an automated system, “programmed to create a short position for a percentage of all retail shares routed to it”. Because statistically retail investors lose money, this could indeed be really nice “money-making machine”. It would of course make retail investors lose more money, and that would be contrary to “fair markets”.
What proves would there be about this kind of massive conspiracy? That’s where I end up this story, I point you to the comment thread that finally made me write something here, for like I said: even if it were untrue or just partially true, one can hardly deny the entertainment value of reading about plausible conspiracy theories. Even though much of the information was known in late 2020, the story keeps evolving by “apes” of the Superstonk-subreddit.
I think it would be a very good opportunity to investigate journalism to prove that it still exists in “the free world”— trying to find out what is actually true and what is not.
