In a matter of weeks, two hedge-fund legends — Steve Cohen and Dan Sundheim — have suffered bruising losses as amateur traders banded together to take on some of the world’s most sophisticated investors. In Cohen’s case, he and Ken Griffin ended up rushing to the aid of a third, Gabe Plotkin, whose firm was getting beaten down. Driven by the frenzied trading in GameStop Corp. and other stocks that hedge funds have bet against, the losses suffered over the past few days would rank among the worst in some of these money managers’ storied careers. Cohen’s Point72 Asset Management declined 10% to 15% so far this month, while Sundheim’s D1 Capital Partners, one of last year’s top-performing funds, is down about 20%. Melvin Capital, Plotkin’s firm, had lost 30% through Friday. And it’s not just the big names: Jack Woodruff’s $2.8 billion Candlestick Capital has fallen 10 to 15% in January on its short wagers, while the $3.5 billion Maplelane Capital lost about 33% through Tuesday in part because of a short position on GameStop, according to investors. By end of day Wednesday, Maplelane was down 45%. The pain is likely spreading across the hedge fund industry, with rumors swirling among traders of heavy losses at multiple firms. The Goldman Sachs Hedge Industry VIP ETF, which tracks hedge funds’ most-popular stocks, tumbled 4.3% on Wednesday for its worst day since September.
The hedge funds’ assailants are a collection of traders using Reddit’s wallstreetbets thread to coordinate their attacks, which seem to be focused on stocks known for being held short by hedge funds. The most prominent is GameStop, the beleaguered brick-and-mortar retailer that’s soared more than 1,700% this month, but other targets include AMC Entertainment Holdings Inc. and Bed Bath & Beyond Inc. Nick Note: What you are seeing is nothing short of market manipulation……. Let me tell you how this goes. Some BIG traders using sophisticated tools not available to the average Joe are identifying short interest overloads where the hedge funds are vulnerable. The equations goes like this…. Short sellers borrow the shares of stock to sell. They have unlimited liability because is a squeeze they cannot find the stocks shares they sold short to deliver. Thats what bids up the price to the moon. THe way one identifies the most vulnerable is to find where the hedge funds have sold more shares short then are in existence. This is not a game i play but i know how to do it. You must uncover this information in a timely and sophisticated manner. And useing the published public short interest reports are a joke. Their are far more sophisticated ways that involve dark pool information (that can be purchased) and massive computer power. SO once you find a company where the funds selling represent a short interest of 130% of the shares you can fuck them big time. Because their are not enough shares in existence. So here is how this goes…. your SOPHISTICATED tools identifies the companies where the short sellers are underwater and vulnerable. And you MANIPULATE the stock by getting massive buying. Stupid buying that causes valuations that are on a course to Mars. The new manipulation trick is to get the kids on Reddit and Robin Hood and social media chat rooms all pumped up and get them to buy the stocks in companies you have identified as vulnerable. What you are seeing is a new twist on a old game. And it will end badly. I have been at this a long time. And it will take the bureaucrats at the CFTC and SEC to figure this out. And they will ban this practice and roll back the trades……….They will not be allowed to wipe out the biggest retirement funds and University endowments…… A big kaboom is coming!I
I was charged with market manipulation (after we wiped out several brokers including the biggest of the time) because my trade recommendations swung the markets. It was not manipulation but the fact we had 150,000 subscribers meant a lot of people were making the trades. They claimed we were a internet computerized trading system. It was a battle where i suffered a bitter defeat. Got a ban and at the time the largest fine any individual was ever handed. And lost hundreds of millions of dollars.
So let me repeat. I know a market manipulation when i see one. And this El Toro Robin Hood deal will end badly. And if i can scratch my ass and figure ir out we COULD make a killing.
