The hedge fund that bet against Gamestop, shorting the stock, only to see the #stronk campaign push the price upwards, has gone bellyup. White Square Capital out of London is selling all assets, in managed over $400 million, and returning what remains to investors.
Timcast covered the amazing story on their YouTube channel. The meme stock campaign evidently contributed to a double-digit loss for the fund as average investors waged guerilla economic warfare on the hedge funds. The naked shorting of stocks, using leveraging, essentially rigs the game and amounts to pure speculation. But the “ape army” of millions of average Americans isn’t having any of it and are directly targeting these practices to counteract them.
Even more highly leveraged funds are also at risk as average investors connect and collaborate, share notes, and compare tactics. This is making the average investor smarter than the insiders, who tend more toward speculative games than straightforward investing on the basis of actual profitability.
The potential for rapid and wild swings is great as “the apes” and “meme stocks” battle the insider speculative games of the mega investor. But accountability for these unethical games that destory companies and ruin lives is coming and has at least come for this fund.
