The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees
by Ben Mezrich · 6 Sep 2021 · 239pp · 74,845 words
began to cover, buying shares to return them to their lenders, the stock would rise even higher. In financial parlance, this was something called a “short squeeze.” It didn’t happen often, but when it did, it could be spectacular. Most famously, in 2008, a surprise takeover attempt of the German automaker
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—led to a squeeze involving supplement maker—and alleged pyramid marketer—Herbalife, which cost Ackman a reported $1 billion. And perhaps the first widely reported short squeeze dated back a century, to 1923, when grocery magnate Clarence Saunders successfully decimated short sellers who had targeted his nascent chain of Piggly Wiggly grocery
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in late December—but still, there was plenty of potential upside. In the back of Keith’s mind, visions of the beginnings of the fabled “short squeeze” the WSB board continuously crowed about sparked to life—but he didn’t want to get ahead of himself. He’d tried to stay above
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traveled in very different circles. If Plotkin had ever driven through Brockton, he’d likely have kept the windows closed and the doors locked. But short squeeze or not, Keith believed that GameStop, the company that had already made him a millionaire, was about to have another moment. He looked down at
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only a matter of time before they’d reach the more mainstream news outlets. Though it was still a matter of debate whether a true short squeeze was beginning, the stock motion had been insane—just a few hours ago, Jeremy had watched the price reach $43. That meant his shares were
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bought when they saw value, and they sold when they sensed things were about to go the other way. All the talk going on about short squeezes—most likely, it was just that, talk. Every time a stock with ugly fundamentals went up, amateur traders loved to shout about
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short squeezes. But they almost never actually happened. Maybe fifteen times in the past decade had a true short squeeze actually occurred. Jim would continue to do his job diligently as he always did, keeping an eye
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—better. Using his neurolink to sift through the comments on the WallStreetBets board, certain names and words and themes sprang out at him—Melvin Capital, Short Squeeze, Wall Street vs. Main Street—and he felt fire rise in the pit of his stomach. Elon didn’t just identify with the “retards” and
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was unnecessary and immoral to profit when someone’s dreams fell short. He had no doubt that what he was witnessing with GME was a short squeeze in action. The day before, Monday, January 25, the stock had closed at $76.79. It was now about to open at $88.56. Pretty
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just about anyone on the Street. Citadel, too, had supposedly, reportedly, lost money on the GameStop debacle—what was undoubtedly now the beginnings of a short squeeze—through its own investments. Though Ken, again, reportedly, had nothing near the exposure of his fellow titan, sometime rival, and Gabe’s previous boss, Steve
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very retail trades—and was effectively the backbone, through its payment for order flow symbiosis, of the online brokerage—that had led to the GameStop short squeeze, could have put a finger on the scale. But that was something Ken and Citadel would never, under any circumstances, EVER, no matter what people
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week progressed. The crazy thing was, so far, everything the “retarded apes” had said was going to occur, actually had. On the positive side, the short squeeze was clearly in effect, and Melvin, Citron, and their ilk had scrambled, or were scrambling, to cover. On the negative side, there was a clear
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CNBC; an interview on the channel had led him to believe that Melvin Capital had completely covered their short position, which meant that maybe the short squeeze would end as quickly as it had begun. Jeremy had literally screamed at him—nobody on the WSB board believed that could be true. The
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of the entire WSB subreddit? Could it really have something to do with the powerful Wall Street funds, and their efforts to shut down the short squeeze? Could it really be some sort of a first strike? Wall Street was powerful. Firms like Melvin Capital and Citadel had billions of dollars at
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from what could easily be described as the result of a series of logical, if coincidental, occurrences. Melvin’s short position had exploded into a short squeeze because the retail traders on WallStreetBets had targeted GameStop, had bought and bought and bought, causing massive volume and price volatility. Robinhood, through which a
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shut down buying of GameStop. True, one could argue, this in turn would stop the rise in GameStop’s stock, poking a pin into the short squeeze, potentially allowing the hedge funds to cover. And also, true, Citadel—who BY COINCIDENCE handled most of Robinhood’s trades and BY COINCIDENCE provided the
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to couch it as if it were some clinical, unemotional, perfectly acceptable maneuver, it appeared, from the outside, like a direct attempt to stifle the short squeeze in progress. Only the retail traders had been shut off, and only the buy side of GME had been shut down; institutions were free to
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predicted all over the WSB board—and seemed utterly unstoppable. Then Robinhood had pulled the plug—and it was like a shotgun blast to the short squeeze. The stock had plunged, more than 40 percent, opening at $265 a share. From there, it had been a roller coaster—the stock descending as
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$193.60. If there was any question as to whether you could point squarely at Robinhood and the other online brokerages as to why the short squeeze had apparently imploded, you needed only to look at the daily trading volumes. With the buy side effectively squelched, the volume of shares traded had
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were being hurt way worse than he was. Most hadn’t bought GameStop anywhere near $5 a share; the vast majority had bought once the short squeeze had begun, and many had bought near the top. They were losing money—and it seemed extremely unfair. Even the WallStreetBets board itself had taken
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post had gone up—and all hell had broken loose. A day later, the stock had grudgingly recovered, but there was no doubt that the short squeeze had been interrupted. Whether it could regain its footing—whether there were enough shorts left and enough diamond hands opposing them to push the stock
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only did he have the winning bottle cap, but the entire beer. “Look,” Casper said. “I was wrong and you were right. You got your short squeeze. You made over a hundred thousand dollars. And now you’re going to lose every penny of it. Because—and I mean this in the
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past few days. Turbulence didn’t even begin to describe what she had been through since Robinhood had turned off the spigot and dampened the short squeeze. For all she knew, by the time her flight home from Phoenix reached cruising altitude, her moonshot rocket ship was going to be more like
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. When the stock had touched $500 in premarket that Thursday, seven days ago, it had seemed like nothing was going to stop the rise. The short squeeze she’d explained to Chinwe was really, finally in full swing—and a price of $1000 no longer seemed like a fantasy. Paying for Brian
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first learned that Robinhood had restricted buying, the consequences hadn’t quite hit her. Sure, the downward pressure took some of the steam off the short squeeze, but she’d always assumed it would be temporary, and she knew from reading WallStreetBets that the community was determined to see it through. Anyone
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’t. Ultimately, the reason that it had instead gone up was murky. Could a bunch of unsophisticated, loosely coordinated retail traders actually launch such a short squeeze? Or was something deeper happening, which was yet to be uncovered? If the committee was really looking to understand where Gabe’s trade had gone
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shopping there…” A dude, who was still, despite the massive drop in the share price of GME since Robinhood had punched a hole in the short squeeze, worth close to $20 million, at least “on paper.” “Second, I believe that GameStop has the potential to reinvent itself as the ultimate destination for
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the way back up to $40 and beyond, and still, apparently, had been doubling down. Richard did not intend to make the same mistake. The short squeeze in full effect by the beginning of the week of January 25, he prepared his trading team to accept their win. Picking the moment to
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didn’t make you feel full. It just made you hungry for more. After On February 19, one day after the congressional hearing on the short squeeze that rocked the world, Keith Gill posted his first YOLO update on WallStreetBets in over two weeks. According to the screenshot attached to the post
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of GME had plummeted from its highs of near $500 a share after Robinhood’s actions had arguably put a lid on the WSB-powered short squeeze to the low $40s, Keith had announced, through his post, that he was as bullish as ever, doubling his stake to 100,000 shares of
Blank Space: A Cultural History of the Twenty-First Century
by W. David Marx · 18 Nov 2025 · 642pp · 142,332 words
.” This culture of financial speculation spilled into traditional markets. Reddit thread r/wallstreetbets orchestrated one of the most symbolic events of the 2020s: the GameStop short squeeze. Led by Keith Gill (a.k.a. Roaring Kitty), the group of amateur investors caused massive losses to hedge funds, while Gill allegedly turned a
The Revolution That Wasn't: GameStop, Reddit, and the Fleecing of Small Investors
by Spencer Jakab · 1 Feb 2022 · 420pp · 94,064 words
scrolling through memes on Reddit. If they had, they would have seen newly minted speculators with chips on their shoulders writing entries like “the biggest short squeeze of your life” and “Bankrupting Institutional Investors for Dummies.” Some of these managers would even have seen their own names as the degenerates perused public
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a conduit to feed fish to sharks.” Another member asked Tenev if he should have seen the trading frenzy coming. Tenev called the meme-stock short squeeze a “black swan” event that had a one in 3.5 million chance of occurring. Maybe the former mathematics PhD student’s numbers were accurate
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ethos of the group was always to find profitable hacks or vulnerabilities. In this case, some members were sophisticated enough to understand the mechanics of short squeezes. “So this is just a nice setup for them to get into it, and then all of a sudden it starts to gain traction. . . . Everyone
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more than fiftyfold and was sentenced to prison for an unrelated securities fraud. Though not part of his conviction, Shkreli was the architect of a short squeeze smaller but wilder than those affecting the meme stocks when he led a group that bought up most of the worthless shares of the pharmaceutical
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the harassers had met Left or Greenfield, the men were viciously targeted. At its most extreme and obnoxious, then, WallStreetBets not only engineered an epic short squeeze in the meme stocks but also personally intimidated people on the other side of the argument. In the future, investors, analysts, and even financial journalists
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shares of GameStop. On April 13, a user on WallStreetBets with the pseudonym Senior _Hedgehog wrote a post with the headline gamestop (gme)—the biggest short squeeze of your entire life.[4] It pointed out a few fundamental attractions of the stock, discussing the console cycle, the fact that demand for video
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surged by 22 percent on April 13. Then they jumped by nearly 26 percent the following day to close at $5.95. This was a short squeeze, but it wasn’t the big one yet. The brief surge certainly didn’t spook Gabe Plotkin or many other deep-pocketed funds betting against
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them to increase their wager. At the end of the month, the always-astute Gill weighed in: “Plus there’s now an opportunity for a short squeeze of some sort, though that was never a part of my original thesis. I still think it’s unlikely but when the shorts exceed the
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forced to exit the position by buying it back, in the process exacerbating the rise in the stock and their own losses. That is a short squeeze. A “corner”—which is extremely rare and is very difficult to execute legally since securities laws were changed in the 1930s—is an extreme type
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of short squeeze when there simply aren’t enough shares to purchase because some person or group has sewn up the supply. Then you can practically name your
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an exasperated Jim Chanos, founder of Kynikos Associates and dean of the short-selling community.[4] But did the WallStreetBets crowd really engineer the “biggest short squeeze of your entire life”? Not unless they were very young. A (Short) History of Squeezes Volkswagen would briefly become the world’s most valuable company
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as the result of a short squeeze. In the spring of 2008, Porsche, which had long held a 31 percent stake in its fellow German automaker, indicated its desire to gain more
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$100 million a year.[6] Despite the image of short sellers as pessimists, most short selling actually is part of long-term investing strategies. Moreover, short squeezes aren’t exactly rare, and they are rarely spectacular. What generally happens is that there are a lot of bets against a company that is
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some short sellers decide to cut bait and rush to buy back the stock. Sometimes inexperienced investors will see a stock rise rapidly on a short squeeze and mistake it for some fundamentally good news about a troubled company, buying some shares themselves. It is a classic rookie error. You S3XY Thing
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Damodaran, who teaches finance at New York University’s Stern School of Business, there have been “at least three and perhaps as many as five short squeezes on Tesla” with 2020 just being the most recent.[8] “With Tesla, individual investors who adore the company have been at the front lines in
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sellers aren’t run by unsavory characters, and most short sellers don’t shout their opinion from the rooftops. Plotkin, the chief victim of the short squeeze in GameStop, quietly established his position in 2014 because he thought it wasn’t a very good business. Most of his holdings were of stocks
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, except for occasionally posting his E*Trade account balance. The congratulatory messages from the degenerates had turned back to snarky ones as excitement over the short squeeze faded and GameStop shares again began to languish. “What a way to blow 100k,” wrote one WallStreetBets user at the end of June, by which
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over two sessions. GameStop’s share-price surge following Cohen’s arrival only emboldened professional skeptics. When Senior_Hedgehog first mentioned the idea of a short squeeze in April, shares sold short were an extremely high 80 percent or so of those available to trade. By the eve of Cohen’s arrival
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years off the new console hype alone. When the stock hits roughly $15, we can expect to see several margin calls trigger a fucking massive short squeeze. There were relatively few mentions of GameStop on the forum the following month, but they began to rise in early November. For example, the stock
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bang for the buck on the price of the stock. When a member of WallStreetBets got the idea in September to “trigger a fucking massive short squeeze,” as detailed in the post “Bankrupting Institutional Investors for Dummies,” another chimed in with a more sophisticated strategy than just buying the shares. It was
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up was expensive. Buying the cheapest options contracts wasn’t—not at first. The trick was getting options dealers to be unwitting accomplices in a short squeeze because their risk managers told them they had to. “Sup gamblers. Feel bad about missing the gain train on TSLA? Fear not—something much greater
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out mostly movie-based memes. One on December 10 had a still of the scene where Inigo Montoya speaks with Vizzini in The Princess Bride: “Short Squeeze. You keep using that phrase. I do not think it means what you think it means.” In other words, the real action was still to
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subreddit. By that day, the stock was worth more than ten times what it had been the previous spring. All the ingredients for the epic short squeeze had fallen into place bar one: Andrew Left would make his ill-advised taunt five days later, on January 19. Left wasn’t just lighting
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’s latest screenshot of his E*Trade balance that afternoon, the man himself didn’t offer any forecast of how long or how far the short squeeze that was making him rich would go: This is above my pay grade, as I hope most people know by now.[5] The aw-shucks
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securities laws in the 1930s, it has been illegal to collude and buy up a stock to manipulate its price—for example, to engineer a short squeeze. If it became known that three hedge fund managers had agreed behind closed doors to target a fourth fund with a big short position, then
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was prudently guaranteeing that, in the worst-case scenario, he would walk away a very wealthy man. Nobody on the board who had made the short squeeze a mission rather than a moneymaking opportunity seemed to fault him—nor should they have. Even after Tuesday’s session, Gill still had $18 million
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. “You had that first squeeze from the people who took the first punch,” he says. “When it got close to $70, you had another huge short squeeze.” According to one school of thought, it wasn’t such a big deal. CNBC’s Michael Santoli observed that the market value of all stocks
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who are getting commissions and revenues out of this new bunch of gamblers. And, of course, when things get extreme, you have things like that short squeeze.”[12] A Robinhood spokesperson was quick to take the bait. In one fell swoop an entire generation of investors has been criticized and this commentary
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of the company’s shares during September and October as Ryan Cohen arrived on the scene. Its managers had been on the losing side of short squeezes in the past, and they didn’t hesitate to cash in their chips when this one hit, reaping a profit of $700 million.[13] Must
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offered them a free large popcorn during their first visit to an AMC theater that summer. For all of their surprising sophistication in engineering a short squeeze, the WallStreetBets crowd failed to appreciate that the torrent of stock sales by AMC and its insiders would allow short sellers to escape a trap
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subreddit was filled with exhortations to stop selling and naïve theories as to why GameStop shares really were falling. According to a popular theory, the short squeeze was still on, but hedge funds were manipulating GameStop’s price to make it appear as if it had ended. It held that hedge funds
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cheat the little guy. The idea even got a US government hearing in 2010. And, ironically, silver was caught in one of the most famous short squeezes of all time in 1980. In that case, the establishment really did circle the wagons to bring it to an end, leading to the bankruptcy
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on WallStreetBets, short sellers, might have taken a permanent hit, though, and it isn’t good news at all for the little guy. Now that short squeezes can be arranged on social media, it has become much riskier to be in that none-too-popular business. “Shorts play an incredibly important role
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/28/keeping-customers-informed-through-market-volatility. BACK TO NOTE REFERENCE 1 Joseph Saveri Law Firm, “Short Squeeze Stockbrokers and Hedge Funds Face Proposed Antitrust Class Action,” press release, February 1, 2021, www.saverilawfirm.com/press/short-squeeze-stockbrokers-and-hedge-funds-face-proposed-antitrust-class-action. BACK TO NOTE REFERENCE 2 Akane Otani
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. BACK TO NOTE REFERENCE 21 Robert Frank, Nick Wells, and Pippa Stevens, “Koss Family and Company’s Execs Cash in $44 Million in Stock during Short Squeeze Frenzy,” CNBC, February 4, 2021. BACK TO NOTE REFERENCE 22 Ed Lin, “AMC Executives Sell Large Amounts of Stock,” Barron’s, January 29, 2021. BACK
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, Dan, 240 Galvin, William, 29 gambling, 30–31, 55, 57 lotteries, 62, 239, 241, 242 sports, 26, 30–31, 57 Gamergate, 125 GameStop (GME), GameStop short squeeze, x–xiv, 2, 10, 12, 16, 21, 22, 26, 30, 31, 36, 54, 56, 60, 61, 67, 72, 76, 80, 83, 85, 86, 88, 93
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, 211, 213 global financial crisis, xi, 6, 8, 10, 21, 28, 58, 63, 69, 70, 78, 83, 143, 199, 204, 215 GME, see GameStop, GameStop short squeeze Goepfert, Jason, 227 Golden State Warriors, 158 Goldman Sachs, 9, 55, 63, 76, 132, 170–71, 178, 219–20, 254 Google, 46, 162, 243 Google
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, 224–26 Bed Bath & Beyond, 115, 133, 188 BlackBerry, 93, 115, 133, 169, 178, 188, 224 bot activity and, 165, 166 GameStop, see GameStop, GameStop short squeeze insiders of, 224 Koss, 132, 169, 188, 224 margin debt and, 58 Naked, 132, 188 Nokia, 169, 178, 188 payment for order flow and, 207
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Volkswagen squeeze and, 78 Reddit Revolution, xv, 41, 42, 75, 99, 152, 170, 192, 206, 211, 219, 220, 230, 246, 261 see also GameStop, GameStop short squeeze; WallStreetBets rehypothecation, 80, 92 reinforcement learning, 35 Reminiscences of a Stock Operator (Lefèvre), 78 Renaissance Technologies, 237 retail trading, xiii, xiv, xvi, 4, 7, 9
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, 133, 140, 164, 169 long-term strategies and, 81 misunderstandings about, 80–81 naked, 80 rehypothecation and, 80, 92 Tesla and, 81–82, 106, 107 short squeezes, xii, 5, 23, 39, 40, 72, 73, 75–77, 81, 107–8, 113, 126, 139, 184, 221, 247 corner in, 75 GameStop, see GameStop, GameStop
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short squeeze gamma, 108, 109, 132, 141, 216, 227–28 history of, 77–80 silver, 229–30 Volkswagen, 77–78, 81 see also meme stocks Shkreli, Martin,
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, 73, 76, 79, 92 sharing of losses on, 144 Stonksflyingup on, 95, 109 taken off-line, 190 WeLikeTheStock and, 126, 242 see also GameStop, GameStop short squeeze Wall Street Journal, ix, 30, 50, 52, 61, 84, 118, 128–29, 132, 136, 152, 171, 179, 180, 210, 211, 223, 250, 253 Wall Street
Big Debt Crises
by Ray Dalio · 9 Sep 2018 · 782pp · 187,875 words
has been a dollar squeeze. This squeeze…is hitting dollar-indebted emerging markets (particularly those of commodity exporters) and is supporting the dollar. When this short squeeze ends, which will happen when either the debtors default or get the liquidity to prevent their default, the US dollar will decline. Until then, we
Trading and Exchanges: Market Microstructure for Practitioners
by Larry Harris · 2 Jan 2003 · 1,164pp · 309,327 words
were caught short suffered tremendous losses. Hutchinson ultimately specified the prices at which he released them. He made millions of dollars from this corner. ◀ * * * * * * * * * ▶ A Short Squeeze in a Penny Stock Fraud XYZ is a thinly traded, low-priced stock with a small float. The float of a stock consists of those
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buying the stock at a high price from the squeezers. Although Ian was right about XYZ being overpriced, he still lost much money in this short squeeze. ◀ * * * The largest and most notorious squeezes have occurred in commodity futures markets. Smaller squeezes occasionally take place in thinly traded stocks. Squeezes are now illegal
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is the relation between value traders and sentiment-oriented technical traders? • What is the relation between information-oriented technical traders and sentiment-oriented technical traders? • Short squeezes occur when traders with short positions are squeezed. Can traders with long positions also be squeezed? • What type of order anticipator is a trader who
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. Under such circumstances, the basis probably has moved against arbitrageurs. Such buy-ins therefore are especially costly. On rare occasions, short squeezers may manipulate arbitrageurs. Short squeezes (described in chapter 11) are particularly costly to arbitrageurs. They typically occur when the basis has widened greatly. Arbitrageurs who are caught in a squeeze
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during the preopening period of the Paris Bourse. Journal of Political Economy 107(6), 1218–1248. Jarrow, Robert A. 1992. Market manipulation, bubbles, corners, and short squeezes. Journal of Financial and Quantitative Analysis 27(3), 311–336. Jarrow, Robert A. 1994. Derivative security markets, market manipulation, and option pricing theory. Journal of
The Investopedia Guide to Wall Speak: The Terms You Need to Know to Talk Like Cramer, Think Like Soros, and Buy Like Buffett
by Jack (edited By) Guinan · 27 Jul 2009 · 353pp · 88,376 words
rather than holding on to them. (2) Companies buy back shares on the open market over an extended period. Related Terms: • Debt Financing • Outstanding Shares • Short Squeeze • Dilution • Short Covering C call What Does Call Mean? (1) The period of time between the opening and the closing of some future markets in
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that are easily converted into cash include blue-chip stocks and money market securities. Related Terms: • Illiquid • Cash and Cash Equivalents—CCE • Liquidity Ratios • Volume • Short Squeeze Liquidity Ratios What Does Liquidity Ratios Mean? A class of financial metrics used to help determine a company’s ability to pay off its short
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a “value” play, but a rapidly rising stock will be seen as increasingly risky with every upward tick. Related Terms: • Demand • Long (or Long Position) • Short Squeeze • Fundamental Analysis • Short (or Short Position) Long-Term Debt What Does Long-Term Debt Mean? Loans and financial obligations with maturities lasting over a year
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allowing negative sentiment to be reflected in certain stocks’ prices. 193 194 The Investopedia Guide to Wall Speak Related Terms: • Margin • Regulation T—Reg T • Short Squeeze • Option • Stock Option Nasdaq What Does Nasdaq Mean? A computerized market or exchange that facilitates trading by providing price quotations on more than 5,000
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a specific commodity or asset for a specified price and at a quantity by a specified date. Related Terms: • Bear Market • Long (or Long Position) • Short Squeeze • Buy to Cover • Short Interest Short Covering What Does Short Covering Mean? Buying back a security to close an open short position. This is done
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and buy it back at that price. In this case, the trader loses $5 per share ($10 – $15). Related Terms: • Buy to Cover • Naked Shorting • Short Squeeze • Margin Call • Short Interest Short Interest What Does Short Interest Mean? The total number of shares (securities) in the market that have been sold short
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investors are pessimistic about that company’s future and the direction of its stock price. Related Terms: • Long Squeeze • Short Interest Ratio • Volume • Short Sale • Short Squeeze Short Interest Ratio What Does Short Interest Ratio Mean? A sentiment indicator that is derived by dividing the short interest by the average daily volume
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ratio of around 5 or greater, this can be taken as a bearish signal. Related Terms: • Short (or Short Position) • Short Interest • Volume • Short Covering • Short Squeeze Short Sale What Does Short Sale Mean? A market transaction in which an investor sells borrowed securities in the hope that the share price will
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may fall to $0 but could rise to infinity. Related Terms: • Buy to Cover • Naked Shorting • Short Covering • Minimum Margin • Short (or Short Position) Short Squeeze What Does Short Squeeze Mean? A situation in which the price of a stock moves upward because of a lack of supply and an excess of demand. Investopedia
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explains Short Squeeze Short squeezes occur more often in smaller-cap stocks with small floats. If a stock starts to rise rapidly, the trend may continue because the short sellers
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, 193-194, 270 Short covering, 270-271. See also Buy to cover; Buyback Short interest, 271 Short interest ratio, 271-272 Short sale, 272-273 Short squeeze, 273 SIBOR. See Singapore Interbank Offered Rate (SIBOR) Simple interest formula, 142 SIMPLE IRAs, 138, 251 Simple moving average (SMA), 273-274 Singapore Interbank Offered
Reminiscences of a Stock Operator
by Edwin Lefèvre and William J. O'Neil · 14 May 1923 · 650pp · 204,878 words
, the New York Times reported a “Skyrocket Jump” as the stock blasted higher in the first 15 minutes of trading.22 Heinze had started his short squeeze believing he controlled enough of the shares to effectively corner it. He did not. The next morning shares collapsed to $38 as other shareholders—who
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man “Turn Tail” and “Danny Cold Feet.” Drew, who was not warned when Fisk and Gould turned bullish, was caught in the fangs of a short squeeze. Not only did Fisk and Gould start buying Erie, but they unleashed their hoard of greenbacks. Stocks boiled higher. When Drew went to see his
When the Wolves Bite: Two Billionaires, One Company, and an Epic Wall Street Battle
by Scott Wapner · 23 Apr 2018 · 302pp · 80,287 words
% Position after the Bill Ackman Bear Raid.”27 Chapman called Ackman’s public short a “circus show” and said he was likely to suffer a short squeeze—a quick jump in a stock price driven by others buying the stock, thus sucking shares out of the marketplace. Ackman had already taken away
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.” Icahn continued, “He goes short 20 percent of a company. Goes out there, and I will tell you this could be the mother of all short squeezes. I’m going to tell you this. That one day if somebody tenders for this company and wants all their stock back, what’s Ackman
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he is not used to someone standing up to him. And particularly a little guy like me in 2003. Carl can try to orchestrate a short squeeze. He can do whatever he wants. He can try to scare my investors from investing with me, which it sounds like he is attempting to
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Ackman’s suddenly precarious position, and the off-the-cuff remark Icahn had made during The Brawl, when he threatened the “The Mother of All Short Squeezes.” Such a move could happen if Icahn, or someone else, tried to buy Herbalife outright and take the company private. If he did this, it
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to try to squeeze me out,” Ackman said. “How many times did Icahn go on TV and say this could be the mother of all short squeezes? That was a call to action for every trader to buy the stock.” On Monday, August 5, Ackman officially filed his complaint, but Soros and
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, Ackman restructured his $1 billion short position to include over-the-counter put options, which could help protect him if Icahn followed through on the short-squeeze threat. In a letter to his investors dated October 2, 2013, Ackman explained the move: In order to mitigate the risk of further mark to
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, was making the short thesis public. We didn’t anticipate that Carl would come in and legitimize the bull case and make it into a short squeeze.” Ackman had made it clear by shorting even more stock that he wasn’t ready to give up. The only issue was whether Icahn would
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taking Herbalife private had hung in the air from nearly the beginning of the battle, ever since the investor had mentioned the “mother of all short squeezes” back in January 2013 in the infamous brawl with Ackman. Icahn had broached the subject several times with Michael Johnson, both on the phone and
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, 108, 127, 147, 170, 174 of Herbalife shares, 17, 64–65, 66, 68, 72, 73, 75, 76, 109, 147, 148–149, 199, 201–202 and short squeezes, 85, 106, 107, 112, 139, 148, 202, 203, 215 Silverman, Howard, 117 Simplicity Pattern, 121 Singapore, 58 Singer, Paul, 164 Slater, Robert, 120 Slendernow company
The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis
by Tim Lee, Jamie Lee and Kevin Coldiron · 13 Dec 2019 · 241pp · 81,805 words
not necessarily mean that long-run returns to selling volatility will be low. It only necessarily means that volatility will be prone to extremely severe short squeezes. Volatility Is the Value of Money The depth of the US markets, and the range of financial instruments available in them, places the S&P
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paid a high return per unit of apparent risk with relatively rare events in which liquidity disappears and liquidity providers are decimated. These events are short squeezes in liquidity. They seem to be inevitable given the nature of the premium—given that short rather than long is the naturally profitable side. They
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—as the carry regime causes the underlying risk premium and its liquidity provision premium to become identified with each other. So in equity markets, liquidity short squeezes are to the downside. They form and cause the skew of both implied volatility and realized returns, this skew being another way in which the
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and, 113–121, 203, 210, 213 central bank interventions and, 115 debt, 119, 121 debt levels and, 114 deflation shock, 7, 121–124 deleveraging, 98 short squeezes on liquidity and, 165 INDEX delta, 149 delta hedging, 149–151 Depp, Johnny, 184 Divisia money, 111 dollar (US) carry trade in, 14–23, 15f
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trades providing, 35–36 central banks and, 110–111 currency carry trade and provision of, 88 of emerging currencies, 62 negative pricing of, 166–168 short squeezes on, 165 S&P 500 premiums for providing, 161 volatility curves expressing price of, 164 liquidity backstop, 86 liquidity provision trades, 84 return-to-risk
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and, 159 roll yield, 91 rubisco, 189 ruin risk, 65, 72 sawtooth patterns, 96–97, 97f shadow banks, 137 Shin, Hyun Song, 22, 80–81 short squeezes on liquidity, 165 short-term reporting horizons, 70–71 social hierarchies, 187 social networks, 187 social realities, 184 socialization of risk, 136 South Africa, 55n6
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had unfairly attacked the stock) and schemed to send the price sky-high (“to the Moon”) by buying highly leveraged call options to execute a “short squeeze.” Since r/wallstreetbets had almost two million users by this point, even a small proportion of its users could move the share price if they
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witnesses who testified at the US House Financial Services Committee’s hearing in February was the r/wallstreetbets user most responsible for driving the GameStop short squeeze, Keith Gill (a.k.a. Roaring Kitty on Twitter and YouTube). Gill, a financial analyst, denied any improper or illegal activity such as deliberately encouraging
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investors on social media was a safe way to socialize. We had fun.”74 Gill wasn’t interested in whether Robinhood was gamified. The GameStop short squeeze could have happened without Robinhood, but it couldn’t have happened without social media—and it was the gamification of social media that focused attention
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headlines in the Financial Times or breaking news from CNBC, but it’s never been as interactive—as fun—for so many as the GameStop short squeeze. INTERNET POINTS Sensing opportunity in the post-GameStop world, Cindicator Capital advertised a sentiment trader position with unusual requirements.75 Alongside the usual three years
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the world in minutes—long before the subject can calm down enough to apologise. The same sped-up dynamics were at work in the GameStop short squeeze when Elon Musk tweeted “Gamestonk!!” on January 26, 2021, to over forty-two million followers, leading to an instant jump in the share price, which
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