Reddit's WallStreetBets goes private; banned on Discord for 'hate speech'
Hedge funds have lost billions shorting GameStop and AMC stocks. The WallStreetBets subreddit was intentionally made private by moderators for an hour on Wednesday, after burner accounts (likely orchestrated by corporates losing money) were used to malign and mislead the community. Chat service Discord had banned WallStreetBets under the excuse of hate speech. A strategy that has worked well at eliminating competition so far.
Discord bats for hedge fund billionaires; permanently bans WallStreetBets server
Discord cited the WallStreetBets community spreading hate speech on its platform as the reason for the permanent ban. Reddit, however, didn't take similar action. Eminent investor and industrialist Elon Musk took to Twitter to express his disappointment with Discord over the ban. He is lovingly called Papa Musk by the community for his support of the working class investors despite his billionaire status.
Melvin steers after-hours trading; wild swings recorded during the day
The hullabaloo seems to have rattled novice investors who panicked and dumped shares, while bears continued opening new short positions. This sent stock prices for AMC Entertainment Holdings and GameStop swinging wildly during trading hours on Wednesday. Both stocks dropped dramatically in after-hours trading steered by Melvin Capital. The stocks have since recovered and the Reddit group has established a new community on Discord.
Big Tech comes to the rescue of billionaire hedge funds
GameStop fell 32% late on Wednesday to $218.32, down from $347.51 at closing. AMC shares fell 40% to $11.90 in after-hours trading. The stock rose more than 301% during the day. Meanwhile, Big Tech has come to the rescue of fellow billionaires by using their proven "hate speech" play to stop the working class Redditors in their tracks.
WallStreetBets member pens open letter to Melvin Capital and CNBC
An open letter on WallStreetBets to Melvin Capital and CNBC shows how small investors are treating the GameStop rise as payback from Melvin Capital, a representation of institutions that people lost everything to in 2008. The letter called out CNBC for favoring the institutional investors with its coverage. The letter threatened that the common folks could also influence the channel's sponsors to withdraw funding.
Rare instance of individual investors steering the market
Usually, hedge funds and institutional investors use their billions to steer markets and decide the fate of stocks, but this time individuals trading in cash rocked the boat. The GameStop positive rally is largely due to Chewy co-founder Ryan Cohen's letters to the company's directors since January 11, advising changes in business practices and suggesting the addition of three new directors to the board.
Short-sellers had a ball with GameStop, until Redditors decided otherwise
Movie theater chain AMC said it was near bankruptcy late last year, sending short-sellers and hedge funds flocking to bet on its fall. GameStop's business was slowing as video game distribution went digital. Short-sellers betting on its fall were making money as the management was doing little to arrest the losses.
