Ken Griffin accused the retail community of destroying teacher’s pension plans by taking down Gabe Plotkin’s Melvin Capital.
Melvin Capital is a hedge fund that was short on ‘meme stocks’ holding a large position in GameStop.
The company is scheduled to shut down in June after it had suffered a 50% loss in 2021, and an additional 20.6% in the first quarter of 2022.
Sources say Melvin Capital has already begun to liquidate its positions to pay back investors in cash.
In this Bloomberg exclusive, Ken Griffin plays a role of the victim, defending Mr. Plotkin and the hedge fund whose mission it was to bankrupt GameStop.
Ken Griffin’s Citadel is also short on AMC Entertainment – the hedge fund lost billions last year betting against retail.
Let’s discuss it.
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CNBC mourns the loss of Melvin Capital
CNBC says Melvin was one of the biggest victims from the meme stock frenzy last year due to its large short position in GameStop.
They say Citadel and Point72 had to provide Melvin Capital with a lifeline to stay above the water.
The hedge funds combined provided Gabe Plotkin with $2.75 billion in capital last year.
However, as things went south quick for Melvin, both hedge funds demanded the capital back.
Something Ken Griffin and his affiliates fail to mention.
Mainstream media has also danced around the fact that hedge funds planned to wipe American companies by overleveraging their short positions during the pandemic.
Success in doing so would delist AMC, GameStop, and other meme stocks from the stock market.
Betting against companies with intention to bankrupt them to the ground is no charity work.
It’s un-American and a nefarious practice that has dragged out for too long.
Ken Griffin blames retail investors
In the video below, Ken Griffin gives his thoughts on retail investors and the entire ‘meme stock’ phenomena.
Ken Griffin takes a jab at the retail community saying retail investors who aimed to bankrupt Melvin Capital also wiped-out pension funds from teachers.
But Ken, retail investors don’t get up in the morning and think to themselves, “let’s wipe out a multi-billion-dollar hedge fund.”
Melvin Capital lost because he went against retail – the first time in history the people fight back corruption in the stock market, and win.
Ken Griffin lost billions shorting AMC stock, the retail community is currently his biggest adversary.
AMC shareholders continue to buy and hold the stock until short sellers exit their positions, which will result in a short squeeze.
Today’s retail investors are armed with education, they understand what they hold and what it’s doing to hedge funds.
While Ken Griffin and affiliates might be pumping a narrative as victims, high profiles such as Elon Musk, Jon Stewart, and Ryan Cohen have stood up against short sellers.
For the first time in history, Wall Street is getting their a** kicked, and these hedge fund managers certainly do not like that.
Hedge funds should prepare for bigger losses
Institutions are about to lose a massive amount of collateral due to executive order 14032 in early June.
This presidential order is prohibiting Chinese securities to be used as collateral starting June 2nd, 2022.
It was responsible for initiating margin calls when AMC Entertainment stock rose to $20 per share in January, and $72 per share in June of last year.
With liquidity drying up in global markets, it’s going to be quite difficult for hedge funds to keep up with margin requirements on heavily shorted ‘meme stocks’.
Massive selloffs in the market have proved just how distressed financial institutions are.
We’re seeing for the first-time hedge funds begin to shut down as they take the lead in liquidity burn.
Retail investors have been the majority of buyers in today’s markets according to Bank of America.
Hedge funds are headed towards a larger train-wreck of disaster they cannot get off of.
As they continue to tank the markets, margin requirements go up thanks to DTCC B16845-22.
Hedge funds have lost control.
But I’m curious to know what you think.
Leave your thoughts in the comment section of the blog below.
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