You probably already read about this somewhere on the internet but so many people are missing the complete backstory here so I figured I'd share it in this week's ONE THING 🍿

The Beginning 

• Some guy on Reddit named u/DeepFuckingValue posted about his call on GME in September 2020.
• At the time, nobody understood his position at all. The top comment of that post? “Bid-ask spread on these are ridiculous, good luck getting rid of them” lmao.
• For the next year, every month he posted about his YOLO $GME call and every month he got made fun of.

What did u/DeepFuckingValue saw that the rest didn’t manage to see?

• The short interest on $GME was over 100% of total shares, 140% to be exact. And that was total shares, which was really 300-500% of float.
• Basically, Melvin Capital (the hedge fund who shorted it) was betting that GameStop was going bankrupt so they’d never have to return their shares.
• u/DeepFuckingValue figured this long before anyone did. Even Michael Burry (the guy from The Big Short) bought $GME later than him.

• People on Reddit noticed the overloaded short position and started piling in. This caused the price to go up and Melvin got caught in a short squeeze.
• The losses got so huge that Melvin was forced to buy back the shares to cut some of its losses which only drove the price even higher.
• What's even hilarious is that Chamath and Elon Musk joined the party and bought call options on GameStop as well.
• u/DeepFuckingValue was believed to have turned $50,000 to at least $22 million.

What happened to poor Melvin?

• They already closed their short position and taken a huge loss but the exact amount is unknown.
• After averaging a 30% yearly return since it was founded in 2014, it's now DOWN 30% at the start of the year.
• 2 other hedge funds had to infuse almost $3bil to bail them out.

Although the internet didn't manage to put Melvin out of business but boy they were so close. If you ask my personal opinion on it: I ABSOLUTELY LOVE this. People are talking about price manipulation but market makers have been running over retail traders for decades. It's time for them to have a taste of their own medicine.

Individual investors sharing publicly is not ok but a handful of people colluding behind closed door is?

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