The Reddit reckoning had short-sellers scrambling. Now they're back with a vengeance.

the reddit reckoning had short sellers scrambling now theyre back with a vengeance

Sumary of The Reddit reckoning had short-sellers scrambling. Now they're back with a vengeance.:

  • In January, Reddit’s rowdy WallStreetBets forum became a household name for launching GameStop and a motley assemblage of other “meme stocks” to previously unfathomable heights and, in the process, thrusting phrases like “diamond hands,” “tendies,” and “to the moon” into the popular lexicon.
  • They also put a target on the back of a sworn enemy: Wall Street investors like Melvin Capital and Citron Research who bet against them.
  • Marquee funds lost heaps of money — in the case of Melvin Capital, it opened a crater in its balance sheet so deep that founder Gabe Plotkin accepted a $2.75 billion investment from the hedge-fund hall of famers Steve Cohen and Ken Griffin, the founders of Point72 and Citadel, respectively.
  • Citron’s Andrew Left, one of the most famous bomb throwers in the industry, shocked Wall Street by throwing in the towel on short selling after two decades.
  • “Short Sellers Face End of an Era as Rookies Rule Wall Street,” blared a headline in Bloomberg.
  • “Wall Street’s Most Reviled Investors Worry About Their Fate,” read another from The New York Times.
  • Yes, meme-stock mania cast an undeniable chill over the industry early on this year, especially for passive short selling in the mold of Melvin Capital, which typically involves shorting a broad group of stocks without necessarily revealing their positions.
  • But many activist short-sellers, the investors who wage public campaigns to tank their targets’ stocks, are thriving.

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