Over the past few days, a dispute has broken out over the Gamestop share, which some observers have already argued about David and Goliath hyped up. But what does it mean when a large group of small investors sway large hedge funds through trading apps like Robinhood? One of possibly many answers to this question is now an open letter that one of these traders published in the Reddit forum Wallstreetbets, which is particularly active in the hype around Gamestop.
Fight for Gamestop: Personal matter
The trader calls himself ssauronn on Reddit. In his letter, he explains why he has invested his savings and the money actually provided for the monthly rent into buying Gamestop shares of all things. And why it wouldn’t bother him if this money could possibly be gone soon – for example, if the Gamestop course, as the shortsellers had hoped, would soon collapse. One of the most important sentences is probably: “This is a personal matter for me and millions of others”. In addition, ssauronn wanted to make it “as painful as possible” for the other side.
On the one hand, the letter is directed to the hedge fund Melvin Capital, which apparently exemplifies the established financial system. The US financial broadcaster CNBC and the so-called baby boomers are also specifically addressed. The latter, however, are not attacked, but rather asked for understanding. Ssauronn writes that the elderly should keep their fingers crossed for their children and grandchildren and not support the other side. His generation, so ssauron, now has the opportunity to punish the people who caused them so much pain during the 2008 financial crisis.
Hedge Funds: Off learned nothing from the financial crisis?
The 2008 financial crisis plays the central role in the argumentation of the Reddit users. He still remembers the effects, such as the fact that his family was able to keep the house, but for a year they mostly got rid of pancake mixes, powdered milk, beans and rice. Melvin Capital, ssauronn accuses the hedge fund, has not learned from the crisis. “You and the likes of you were saved and rewarded for the terrible and illegal financial decisions that have negatively changed the lives of millions of people,” ssauron told the hedge fund.
The extent to which the information in the open letter is genuine cannot be verified. But in many of the approximately 8,000 comments that can be found under the entry in the Wallstreetbets forum, similar things are reported. And the users continue to be combative. You will not give up and buy more Gamestop shares. One user wrote, for example, that he had put all his money into the shares and would now only eat cornflakes without milk – just to be there.
Short sellers vs. Reddit traders: hardened fronts
This also shows that how heated the argument has become – and there seems to be no end in sight. In any case, the shortsellers are not thinking of giving up either, despite billions in losses. The battle over the share prices of Gamestop and other companies, meanwhile, has drawn politics and regulators on the scene. The stock exchanges are reacting nervously, and the decline in the major stock markets is partly attributed to the game-stop dispute. In addition, the trading apps had to suspend trading in the affected stocks in between.