Melvin Capital is on life support. Hedge funds have lost $20 billion YTD and are de-grossing at the fastest rate since 2009 following last week's epic GameStop short squeeze. But was it that epic? Because short interest in GME apparently has only dipped 8%! What?? Every time GME shoots up, is some other hedge fund coming in and putting on a new short position in place of the fund that just got taken out? Is this still about Redditors vs HFs or just a battle royale at this point, everyone going nuts in the most exhilirating game in town?
Who know? What we do know is that there are whole of LOT of GME shorts that still need to be covered, a lot of HFs who can put on new ones on, a lot of liquidity in the system and a lot of people stuck at home in front of their screens ready to buy...and that means GME has a lots, lots of runway to move up, Bigly. Oh, and the Biden checks are coming soon.
Also...Robinhood is in desperate need of capital. And then there are the political and regulatory angles. If a financial story is covered by SNL, its massive. And this one has so many sides. The drama has likely just begun...
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