Opinion: On the first anniversary of the big short squeeze, GameStop bulls tried to relive their first attack, and that’s the problem

It’s been a year since retail marketers began their unprecedented move on GameStop GME stock,
-3.66%,
sending the price skyrocketing and short sellers dispersing, creating both a Wall Street panic and the “meme stocks” phenomenon.

And the year that followed was indeed a wild one, spawning a new classification of stocks, fostering even more market volatility, populist outrage, a thriving social media community, congressional hearings, tons of confusion and a realization that the stock market is not a fair place…and perhaps it never was.

On Thursday, GME’s Ape Army attempted to celebrate the anniversary by replenishing January 20, 2021 and it looked promising at first, with shares embracing a nearly 5% gain after an hour of trading. But thanks to a massive market sell-off that culminated in a last-minute reversal that gave investors of all stripes a financial boost, GameStop closed down 3.7% on the day.

And while this was a one-day market phenomenon, it also felt like a microcosm of the past year.

All in all, GameStop’s squeeze felt like it was ushering in an important big moment in American finance, and the jolts of that impact would be felt from afar for some time as we came to understand how much point prolonged low interest rates and a global pandemic had drawn the curtain back on maddening wealth inequality and an opioid-level economic addiction to cheap money, forcing ordinary Joes and Janes to turn on their virtual pitchforks in opening a Robinhood HOOD,
-1.44%
Account.

But, a year later, how different are things really?

Well, if you were to use a meme…

Not only GameStop and AMC Entertainment AMC,
-1.36%
both were trading at their lowest levels since the first half of 2021, they were also doing so on what was essentially average volume with negligible visible short interest.

What were the meme stocks really were getting rich while overthrowing a broken system that allowed market makers and hedge funds to make billions by shorting a stock market that shut out individual investors as regulators turned a blind eye.

And while early returns were exciting, the hedge fund the monkeys hate the most, Melvin Capital, appeared to manage around $19.6 billion at the end of 2021 while the company Reddit identified as its evil enabler, Citadel Securities, just closed a $1.15 billion deal with the titans of Silicon Valley to make it even more ubiquitous and powerful.

Overall, the hedge fund industry appears poised to announce that it has ended 2021 with net inflows, the first year since 2018, and regulators still seem unconvinced that things are rigged enough that they need to anger politicians by suing their biggest donors.

And in terms of populism, the widespread awareness of wealth inequality between Wall Street and Main Street is so palpable now that investment bankers are receiving record bonuses as omicron rages, and Wharton students truly believe that you can make $300,000 throwing salads at Sweetgreen.

We’re not saying meme actions failed – who doesn’t love a comeback in the final seconds? – but it’s becoming clear that a year into this stock market “revolution” things have gotten pretty damn quiet on the barricades.

But why?

Well, at the risk of confusing metaphors hopelessly, it’s because retail investors tried to bankrupt a casino by hitting just a few tables and correct these tables.

Getting stuck in positions like GameStop and AMC has become more of a religion than a tactic at this point, and the switch to direct stock recording in the early moments of what looks like a liquidity crunch is just self-flagellation.

If retail really wants to screw up the casino without drawing the attention of pit bosses, it has to go back to the other part of January 2021, when it diversified the attack and came short under different angles, making it harder for the powers that be to pin them down and stop them.

Getting furious online about the unfairness of it all has officially grown tired, which is a shame because the monkeys make some pretty good arguments in the sometimes absurd tonnage circulating daily.

Order flow payment is causing significant market inefficiencies and creating huge piles of proprietary data for large financial firms that are doing a lot of things at once to feed the algorithms that are still fueling very high volatility. inorganic market. And the consolidation of wealth and power within our financial structure is objectively quite wild at this point.

These points lose their message power, however, when days are spent obsessing and theorizing about stock moves that are no longer relevant to the larger debate. It’s time for retail traders to forget about anniversaries like Thursday’s and keep pushing for other stocks and other corners of the market that will reinvigorate the conversation we never really had.

But if the monkeys really want to honor the spirit of January 2021 in January 2022, they should do so on their Robinhood accounts, the retail muskets.

Alas, that won’t happen because even we have to admit that the monkey uprising claimed two billionaire victims; Robinhood was down another 1.4% on Thursday, keeping co-founders Vlad Tenev and Baiju Bhatt out of the “Tres Commas Club” they were kicked out of thanks to a stock price that’s now down 61% from relative to its IPO price.

So there is some hope for 2022 for the monkeys.

About William G.

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