Regular traders decided to take advantage of a bad gamble made by Wall Street. When Wall Street realized their mistake, the game was afoot. Big tech brokerages and big money swept through for damage control leaving the little guy high & dry.
Over the past week, a community of 2 million investors on r/WallStreetBets saw an opportunity. They believed that (1) the GameStop stock was undervalued and that (2) large hedge funds made a mistake betting on its failure.
They bought the stock en masse, driving up the price and delivering a blow to the hedge funds who bet billions on the stock price dropping. Melvin Capital, a multi-billion hedge fund had to call in for a $2.3 billion investment to cover their losses.
The Wall Street-Robinhood Collusion
"If the service is free, you are the product. Robinhood users thought the service was accountable to them, but actually it exists to serve giant Wall Street institutions like Citadel and other market makers"
- J.E. Karla
Robinhood works closely with large firms like Citadel to turn a profit. It's their biggest customer. Citadel injected $2.75 billion into Melvin Capital - the firm that's set to lose the most (many billions) from the short squeeze on the Gamestop stock.
The price of Gamestop stock rises as people buy it. As it rises, Melvin Capital is set to lose more money. Citadel has investments in Melvin Capital, so as Melvin Capital loses, Citadel loses. Robinhood profits from Citadel, so it's clear: Robinhood has a role to play.
On January 28th, Robinhood and four other major brokerages temporarily stopped customers from buying the stock, helping the billionaire hedge-funds. The game was rigged against the common man to help Wall Street.
It's market manipulation in plain sight. Powerful entities on Wall Street partnered up to protect their own interests and hurt the regular investor.
The following platforms also restricted trading to help Wall Street:
- Charles Schwab
- TD Ameritrade
- Interactive Brokers
- The New York Stock Exchange
The Biden Administration's Record With Wall Street
Joe Biden: As vice president, he oversaw the investigations into the 2008 economic crisis to hold responsible parties accountable.
With Biden at the helm, his record of letting Wall Street slide should calm hedge funds.
Jannet Yellen: The New Treasury Secretary for the Biden administration has serious ties with Wall Street. She made over $7 million speaking at Wall Street Firms, including Citadel (as mentioned above.)
Count her as a man on the inside for Wall Street.
Join the newsletter to receive the latest updates in your inbox.