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Reddit forums to Wall Street: It's not about money anymore, it's a matter of principle

An open letter published by a GameStop investor (GME) makes a declaration of principles before investment funds and traditional media, in addition to inviting the generation boomer (1946-1964) to reject the manipulation of the economy and finance by traditional institutions.

The user ssauron published the open letter on the Reddit WallStreetBets forum, and already has more than 95,000 positive votes on the forum.

The letter is posted in the context of the Massive and coordinated purchase of GameStop shares on the Robinhood app , sparking a move never before seen in traditional Wall Street entities this week.

Most of these individual GME investors come from the Reddit r / WallStreetBets forum, who bet against the short positions that large investment funds maintain in this asset of the company. that of GameStop video games.

The rise in the company’s price shot up 800% this week, according to MarketWatch data. As this asset revalued, investment funds that bet on the price drop were left in loss. Faced with their insolvency, they have put pressure on Wall Street and on regulators to stop the GME market completely and thus avoid further losses.

However, from WallStreetBets they refuse to sell or cut their positions in GME, thus trying to prevent the price of the asset from falling to the position where traditional investors would make a profit. The open letter shows that for thousands of investors it is no longer about making money, but about principles.

Thus is mainly directed to Melvin Capital Management, investment fund that had to close its short positions against GME on Monday, after suffering losses that have not yet been revealed. The firm received an injection of USD 2.7 billion in cash from Citadel and Point72 in cash, reported the Wall Street Journal.

The letter is also addressed to CNBC, as a traditional means of communication, with high influence in the US financial sphere. In addition, it asks the generation boomer , generally akin to traditional narratives, to unite in the same fight against a common enemy: the financial, economic and media establishment .

2008 financial crisis : an outstanding debt

The letter sees in the financial crisis of 2008 an outstanding debt that the risk investment funds and other financial entities have not paid properly. According to the author, he will never be able to forget the economic difficulties his family went through during that episode in world economic history.

Thus, he takes Melvin Capital as his first objective, which despite having been founded in 2014, it is pointed out of unscrupulous practices similar to those incurred by financial entities in 2008.

You represent everything that I hated in 2008. You are a firm that makes money exploiting companies and manipulating the markets and media at your convenience. They are confirmation that those responsible for so many difficulties during the 2008 crisis have not been punished. Their dismissal by law and more recently their manipulation of the market shows that they have learned nothing since. Why would they do it? They would also be rescued and rewarded for their terrible and illegal financial decisions, which have negatively impacted the lives of millions.

Ssauron, Reddit user (r / WallStreetBets).

“This is personal for me and also for millions of other people,” he said, refusing to sell his position.

I bought GME shares a few days ago with all my savings. I paid the rent with my credit card and the corresponding money I used to buy more too (which I don’t recommend to anyone). I am resisting in my position. The price of GME could go down to USD 120. Still I won’t go anywhere. They can pay for thousands of reddit bots, I won’t budge. They can look for any mainstream media to paint us like the villains in the movie. I do not care. I’ll make this as painful as I can for you guys.

Reddit user Ssauron (r / WallStreetBets).

The means of communication are also responsible

CNBC is perhaps the main television medium specialized in finance in the United States, although there are other prominent media such as Bloomberg, for example.

In the opinion of the author of the letter, This satellite television channel has promoted the agenda of traditional entities, but only in exchange for a “short-term” benefit, he indicates.

As he argues, CNBC’s audience will be progressively reduced as they get old enough to stop caring, but the millions of people affected by the 2008 crisis will not forget the role of this channel in defending traditional institutions.

Although CNBC could be classified as a media mainstream or of majority tendency, in view of the Robinhood events, spaces have been opened for opinions diverging from the predominant editorial line in that channel.

For example, Chamath Palihapitiya , CEO of Social Capital and owner of the Golden State Warriors basketball team, commented on his strategy for the sale of GME on CNBC, in turn defending the right to free trade in assets by minority investors.

In 2008 Wall Street mutual funds took huge risks and left minority investors behind. Many of these investors were children when that happened. Some lost their homes, their parents lost their jobs and they always wondered how it is possible to rescue the big investors who took big risks, but nobody dared to help my family?

Chamath Palihapitiya. Investor. CEO of Social Capital.

Commentator and bitcoiner Anthony Pompliano also mentioned that tomorrow Friday morning he would be speaking on CNBC about Robinhood, WallStreetBets and of course, Bitcoin.

Boomers : the most conservative generation

The letter is also addressed to the Boomer generation, or those who have ages close to between 60 and 80 years of age, and who are usually classified as quite conservative and therefore, defenders of the traditional financial and political system.

«We are not enemies, we are the same side, ”reads the section addressed to this generation. This is how he points out that the 2008 crisis not only affected them, but especially their children and grandchildren.

«Your children, your grandchildren, have suffered thanks to the institutions that we are fighting. Are you going to support them over your friends and your family? », Rebukes the author of the letter, clarifying that it is not an invitation to buy GME shares, but rather asks the so-called boomers to be understanding with the situation and join forces in this protest cause.

The open letter calls for the empathy of the boomer generation with the cause of the new generations. Source: ErikaWittlieb / pixabay.com

Panic button: Robinhood and other companies stop trading

This morning, Robinhood stopped the purchase of GME , allowing only the sale method, arguing to protect the market on his blog. It also blocked the purchase of the shares of AMC, a film company, and other assets that were also promoted on Reddit, such as BlackBerry (BB), Nokia (NOK) and the renowned tourism company, Trivago (TRV).

Other investment funds such as TD Ameritrade and Schwab also limited the commercialization of GME, AMC and other volatile assets, joining Robinhood in this restriction.

Following this measure , the price of GME today fell again to previously exceeded levels , falling from USD 430 to USD 120, according to MarketWatch. With a slight correction, GameStop (GME) maintains an average of USD 230 at press time.

US legal regulators and political figures launch investigations

Reports indicate that the White House is already investigating the situation through the Treasury Secretariat , according to statements offered by the Press Secretary of the seat of government, Jen Psaki.

Likewise, US Congresswoman Alexandra Ocasio-Cortez (AOC) pledged to investigate Robinhood and other trading services.

We need to know more details about Robinhood’s decision to block minority investors from buying shares, while hedge funds can buy and sell as they see fit. As a member of the Financial Services Committee, you support holding a hearing.

Alexandra Ocasio-Cortez, US Congresswoman.

AOC continued his message noting that I would be investigating other trading companies that have made similar decisions.

This will not be limited to just Robinhood. This is serious business. The committee investigators should examine the services that are freezing the purchase of shares, following the course of a potential investigation, especially in those that allow sales, but limit purchases.

Alexandra Ocasio-Cortes, AOC.

Spanish financial authorities issue warning

In Spain, the National Securities Markets Commission issued a warning regarding the possibilities of cases such as GameStop occurring in the Spanish market.

These episodes of high volatility, with characteristics of virality and coordinated joint actions, constitute an illegal and punishable act for the regulatory body , reports Europa Press.

If someone in Spain wanted to do something Similar to what happened in the United States, only the attempt to place the value of a share in artificial values, up or down, would constitute market manipulation.

National Commission of Securities Markets, Government of Spain.

It is also indicated that the sanctions that warrant “market manipulation” include fines that reach EUR 30 million. This according to article 302 of the Securities Market Law.

Wall Street asks the markets for mercy, but does not learn the lesson

As we reported in CriptoNoticias, the suspension of exchanges in Robinhood and other operators could be due to manipulation of Wall Street, which suffers this wave viral, disruptive and decentralized of minority investors participating in the market, bringing large corporations and traditional investment firms to their knees.

Wall Street has yet to take generational responsibility for the 2008 crisis. Source: TreptowerAlex / pixabay.com

It is worth highlighting the irony regarding Robin Hood, the famous popular culture character who took from the rich to give to the dispossessed. However, Robinhood seems to contradict itself in relation to what its name promises. “Let people trade,” they said in 2016.

Thus, it is an unprecedented case in the global financial world. Although we seem to be in the era of free applications, these power groups manage to coerce operators to restrict the commercialization of financial assets. This kind of corporate protectionism that it is not consistent with the narrative of capitalism and the free market that is preached.

Clearly, the intervention of third parties with dubious intentions and superior capabilities in a free market is not desirable. In contrast, Bitcoin has been pointed out as an option that could attract the attention of investors, because this network is shielded against manipulation and interruption of its normal operation.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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