GameStop Stock’s Ascent Isn’t About Attacking Rich People

Sorry, Leon. You’re wrong.

GameStop stock has enjoyed parabolic gains as Reddit users saw an opportunity to buy a heavily shorted stock. The extra buy volume generated a short squeeze of the ages, but not everyone is happy.

Melvin Capital has lost billions of dollars from their short position on GameStop. Melvin Capital is owned by Citadel, a hedge fund which also happens to be Robinhood’s top customer. They pay plenty of money to Robinhood for consumer data.

No wonder Robinhood temporarily halted the ability to buy shares of GameStop, Blackberry, AMC, and other stocks that received plenty of love from Wall Street Bets…

…BUT still gave investors the ability to sell their shares.

Now the media and 1% are rushing to depict billionaire hedge fund managers as the victims entangled in “market manipulation” caused by Redditors joining forces to buy a struggling company.

It’s not unheard of for stocks to reach absurd valuations based on a frenzied market atmosphere. GameStop may be ridiculously overvalued if you look at traditional metrics like the P/E, P/S, and EPS, but the dot-com era produced equally if not even more jaw dropping valuations.