Elon Musk lashes out at short-sellers and hedge funds, calling stock-shorting a scam: “You can’t sell houses you don’t own, …but you can sell stock you don’t own!?”
Nickie Louise
Posted On January 28, 2021
The battle between retail investors and Wall Street reached a new level today as lawmakers and prominent people expressing their outrage about how trading exchange platforms like Robinhood, Ameritrade, and WeBull denied trading access to Reddit army (WallStreetBets), a subreddit group of more than 2.8 million members.
It all started this morning after Robinhood announced that millions of its customers will no longer be able to buy Gamestop stock on the free-trading app, thereby blocking the WallStreetBets forum on Reddit. Robinhood also said it aims to do the same for AMC, Nokia, BlackBerry, Naked Brands, and a few other stocks
Now, Tesla CEO Elon Musk is weighing in. In a tweet to his 43.5 million Twitter fans, Musk said, “You can’t sell houses you don’t own, you can’t sell cars you don’t own, but you can sell stock you don’t own!?” Musk added, “This is BS – Shorting is a scam legal only for vestigial reasons.”
u can’t sell houses u don’t own
u can’t sell cars u don’t own
but
u *can* sell stock u don’t own!?
this is bs – shorting is a scam
legal only for vestigial reasons— Elon Musk (@elonmusk) January 28, 2021
A few minutes later, Musk posted another tweet saying, “Here come the shorty apologists
Give them no respect Get Shorty.”
Here come the shorty apologists
Give them no respect
Get Shorty— Elon Musk (@elonmusk) January 28, 2021
Musk’s tweet was well received with one fan saying that “betting against someone else’s success is a corrupt way to make money.”
https://twitter.com/PPathole/status/1354901572631728130
It all started late last year in a battle, some framed as the little guys sticking it to Wall Street. The Reddit community r/wallstreetbets managed to beat hedge fund firms at their own short-selling game by encouraging each other to hold the stocks of GameStop, the flailing video game chain. The stock price GameStop has gone from $2.80 on April 3 to $344.27 as of yesterday. The stock went as high as $500 during pre-market trading.
The Reddit Army has been encouraging each other to pile on GameStop and other similar stocks and keep pushing the stock higher and defeat the hedge fund firms.
According to data from the financial-analytics firm S3 Partners, GameStop short-sellers have lost more than $5 billion in the year to date. CNBC also reported this morning that Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss. CNBC could not confirm the amount of losses the firm took on the short position. Citadel and Point72 have infused close to $3 billion into Melvin Capital to shore up its finances.
Update 5 PM EST: Robinhood caves as it issues statement on market volatility. Now allows GameStop trading to continue on its platform.
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