Tag: Robinhood (Page 1 of 10)

“The Game is Rigged”, Says Ex-Citadel Data Scientist

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Market News Daily: Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue, an ex-Citadel Data Scientist said during the ‘meme stock’ frenzy that the stock market is rigged, claiming he helped design it.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game.”

Not many investors know this, but Patrick actually breaks down how Citadel and other hedge funds were able to make billions back in only weeks from halts.

In this article, I’m going to share his words and knowledge in the industry directly with you.

Share this article to raise awareness of the market injustices ‘experts’ have claimed were never true.

Your voice matters.

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Ex-Citadel Employee Reveals Rigged Trading Game

Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue appeared on Fox Business during the ‘meme stock’ frenzy of 2021 when retail investors created one of the biggest scares in Wall Street history.

GameStop and AMC shareholders were able to create panic on Wall Street by heavily buying shares of the overleveraged shorted stocks.

As share prices soared, short sellers experienced massive losses.

GameStop was able to put Melvin Capital out of business, but Patrick McConlogue says other hedge funds were able to make back billions in losses during the halt.

The halts allowed hedge funds to enter AMC and GameStop knowing shares would plummet, allowing them to capitalize on the deflation of the price.

Patrick says the rules of the game also heavily favor hedge funds, something retail investors have urged SEC Chairman Gary Gensler for years to change.

“I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.”

Below is ex-Citadel Data Scientist Patrick McConlogue’s story.

AMC Stock: The SEC Has Now Violated Threshold Rule

Patrick McConlogue Says the Stock Market is Rigged

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Ex-Citadel employee Patrick McConlogue says the market is rigged.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose.

How do I know? I helped design the game.

A few years ago, I worked at the massive hedge fund Citadel. The multi-billion dollar fund was caught up in this week’s scandal for bailing out hedge fund Melvin Capital after everyday traders on Robinhood appeared close to liquidating the fund through mass buying of the GameStop stock $GME.

My role at Citadel was as an engineer in Long Term Quantitative Strategies. The entire department, filled with programmers and compliance officers, is dedicated to something called ‘alpha’ which determines the buying strategy of the fund.

I was responsible for innovative proprietary technology that capitalizes on public data faster than any other hedge fund. It’s a classic situation of machines against humans. I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.

A group of traders on the r/WallStreetBets Reddit thread, now consisting of over 8.6M members, noticed that someone had overly “shorted” the GameStop $GME stock.

They decided it was the perfect time to buy. It was only around $18 per share and easily affordable for the common investor who kept buying, driving up the price of the stock.

As the buying frenzy continued the hedge funds who had taken the opposite position started to hemorrhage money.. BIG money.

The small investors celebrated their success online as news broke that the hedge fund Melvin Capital Management had lost so much on the $GME short position that they had to be bailed out by bigger hedge funds.

While the markets were closed Melvin Capital’s sinking battleship received an emergency infusion of $2.75 billion from Citadel and Point72.”

‘Meme Stock’ Halts

Ex-Citadel employee Patrick McConlogue says the market is rigged.

“On Thursday morning, Robinhood — the commission-free stock trading app used by small investors — suddenly shut down buys on $GME and a few other stocks that were under siege.

Only sell orders went through, reversing the trend, driving the stock prices back down and shoring up the hedge funds’ sinking ships. Remember, when the stock price goes down, the people who hold the “shorts” make money.

This started a chain reaction. Other retail trading platforms like E*Trade and TD AmeriTrade began freezing the stock for individual investors. But hedge funds own supercomputers.

They have direct access to stock markets. While small investors were frozen the hedge funds traded massive positions and quickly earned back the billions in losses from the past few days.

The rules of the game had been exposed, in broad daylight no less.

Robinhood users, when signing up for the popular trading app that offered “free trading” were likely unaware of their role in the hedge funds’ ability to reap huge profits.

The system is broken.”

Patrick McConlogue left Citadel for decentralized finance and co-founded a new technology called Overline that takes the philosophy of DeFi to the extreme.

Not only is Overline unable to freeze any of your assets but it can’t even turn off the exchange; it’s not possible.

You can read Patrick’s full write-up here.

Related: Ken Griffin Thanks Redditors for ‘Meme Stocks’

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Market News Today - Ex-Citadel data scientist says the market is rigged.
Market News Today – Ex-Citadel Data Scientist says the market is rigged.

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Robinhood Now Reports AMC Market Cap at Whopping $12.49bn

Market News Daily - Robinhood Now Reports AMC Market Cap at Whopping $12.49bn
Market News Daily – Robinhood Now Reports AMC Market Cap at Whopping $12.49bn

Robinhood (NASDAQ:HOOD) is now reporting AMC Entertainment’s (NYSE:AMC) market cap at a whopping $12.49bn.

Users on social media have also shared screenshots of Robinhood reporting AMC’s market cap at $7.49bn this Friday.

Robinhood AMC Market Cap $12.49bn – Source.

However, this is not the first time Robinhood reports these types of discrepancies, though some investors theorize this could be ‘leaked’ information.

In March, Robinhood reported AMC with a $417 billion market cap putting the movie theatre chain up there with Facebook at the time.

During the time of these reportings, investors were able to gain the attention of AMC Entertainment CEO Adam Aron, which responded to the discrepancies.

The CEO said that data sources were under review for accuracy for several sources, including MarketWatch, which at the time were reporting the company’s equity APE (NYSE:APE) of having a 93.79 billion market cap.

“Market Watch currently showing 93.79 billion APEs outstanding. Clearly WRONG, wildly so. We are calling them now demanding this get corrected immediately. 

Also reviewing many other data sources to check for accuracy. So curse-word-here irresponsible that they publish false info,” said the CEO in March.

The uproar at the time led shareholders encouraging the CEO to begin looking into the possible manipulation of the movie theatre’s stock.

In May, CEO Adam Aron threatened to sue Robinhood when the company falsely reported on its platform that AMC Entertainment had filed for bankruptcy.

“I am so Ducking angry about this. They are either incompetent or evil, and either is absolutely inexcusable. Obviously, there is no truth to their postings. Outrageous behavior. I have already asked our lawyers if we can sue the Dastards. #IncompetentEvil”

The CEO even went to the length of creating a poll asking for shareholder opinion, to which majority of investors supported.

Are these AMC market cap reportings simply discrepancies and glitches in Robinhood’s system? Or is information slipping through? I’d love to hear what you think. Leave your thoughts in the comment section down below.

Also Read: Will APE Now Trigger an AMC Short Squeeze Soon?

Other AMC Entertainment News

Market News Daily - Robinhood Now Reports AMC Market Cap at Whopping $12.49bn
Market News Daily – Robinhood Now Reports AMC Market Cap at Whopping $12.49bn

Wedbush has now upgraded AMC Entertainment (NYSE:AMC) from ‘underperform’ to ‘neutral’ with analysts currently looking at a 17.98% upside, Nasdaq reports.

On Thursday, AMC stock fell more than -26% while APE fell nearly -18% despite the fundamental upgrade.

On Friday, shares of AMC Entertainment fell an additional -13%.

Investors have shared a mix of emotions on Twitter, urging CEO Adam Aron to release a public statement on the stock’s performance, see below.

Total shares owned by institutions increased in the last three months by 10.96% to 154,378K shares, according to Fintel data.

However, “the put/call ratio of AMC is 0.49, indicating a bearish outlook,” says Nasdaq.

Exact definitions vary between brokerages, but an underperform rating is worse, in general, than “neutral” but better than “sell” or “strong sell.”

Neutral is assigned to a stock that is expected to deliver results that match the broader market.

Underperform is a stock that will likely perform slightly below par: seeing greater losses in a down market and below-average gains in an up market, per Investopedia.

AMC’s reverse stock split has left shareholders with 10x less shares with the company stock trading 10x higher.

Up next is the conversion of APE shares into AMC common stock which will occur on Friday August 25.

The litigation settlement will then take place on Monday, August 28.

AMC Entertainment has now secured the ability to raise billions of dollars from retail investors despite plunging share prices.

Investors have once again saved the company, but at what cost?

AMC’s upgrade from underperform to neutral is a positive outlook, but unless the news translates over to the company’s stock price, investor confidence is at a standstill.

What are your thoughts on the movie theatre’s current state?

Leave your thoughts in the comment section down below.

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Market News Today - Robinhood Now Reports AMC Market Cap at Whopping $12.49bn
Market News Today – Robinhood Now Reports AMC Market Cap at Whopping $12.49bn

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Robinhood Now Wins Case Over Manipulative Meme Stock Halts

Market News Daily - Robinhood Now Wins Case Over Manipulative Meme Stock Halts.
Market News Daily – Robinhood Now Wins Case Over Manipulative Meme Stock Halts.

Robinhood has won a case over the manipulative ‘meme stock’ halts of 2021 which allowed hedge funds like Citadel to make their losses back.

The 11th U.S. Circuit Court of Appeals in Atlanta ruled 3-0 in its favor regarding the trading restriction of 13 meme stocks back in 2021.

These stocks included AMC Entertainment (NYSE:AMC), GameStop (NYSE:GME) and Bed Bath & Beyond (OTCMKTS:BBBYQ), among others.

In a proposed class action, shareholders of the 13 stocks alleged that they suffered damages because they were restricted from trading.

“When Robinhood restricted its customers’ ability to buy meme stocks, it took a sizable — and perhaps justifiable — hit in the court of public opinion,” wrote Circuit Judge Britt Grant.

“But in this court, Robinhood is only accountable for specific legal duties.”

“The court’s decision echoed a ruling by Chief Judge Cecilia Altonaga in November 2021. On top of that, the Atlanta court also dismissed claims that alleged Robinhood was negligent in protecting its customers from losing money and that it unsuccessfully ensured that its “mission critical systems” worked accordingly,” reports IP.

In May, AMC CEO Adam Aron said the company was seeking to sue Robinhood after the platform had reported the movie theatre chain had filed for bankruptcy.

“What the DUCK !!!!! I am getting multiple reports that Robinhood briefly posted today that AMC filed for bankruptcy.

How can companies like Robinhood do this?

So ludicrous, so wrong, so irresponsible.

On Friday, we report Q1 earnings, and will announce our sizable cash position,” said AMC CEO Adam Aron in a statement on social media at the time.

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Conflicts of Interest Keep Wall Street Safe

Market News Daily - Robinhood Now Wins Case Over Manipulative Meme Stock Halts.
Market News Daily – Robinhood Now Wins Case Over Manipulative Meme Stock Halts.

Patrick McConlogue, an ex-Citadel data scientist appeared on Fox Business during the ‘meme stock’ frenzy of 2021 when retail investors created one of the biggest scares in Wall Street history.

GameStop and AMC shareholders were able to create panic on Wall Street by heavily buying shares of the overleveraged shorted stocks.

As share prices soared, short sellers experienced massive losses.

GameStop was able to put Melvin Capital out of business, but Patrick McConlogue says other hedge funds were able to make back billions in losses during the halt.

The halts allowed hedge funds to enter AMC and GameStop knowing shares would plummet, allowing them to capitalize on the deflation of the price.

Patrick says the rules of the game also heavily favor hedge funds, something retail investors have urged SEC Chairman Gary Gensler for years to change.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game.”

Retail investors are viewing Robinhood’s case win as an act of oppression in the financial markets.

Rules are bent however and whenever deemed necessary to keep the ball in Wall Street’s court.

But I’m curious to know your thoughts on this.

Leave a comment down below.

Also Read: Congress Now Says Not All Naked Shorts Are Illegal

Market News Published Daily 📰

Market News Today - JPMorgan to Pay $290 Billion in New Epstein Case.
Market News Today – Robinhood Now Wins Case Over Manipulative Meme Stock Halts.

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THANK YOU to all of our blog sponsors, this year we’ve been able to increase our email sends and signup slots as well as introduce push notifications.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


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