But just in case they do, Nicoya Research added shares of AG last week at lower prices and have already seen double-digit returns. This is a new phenomenon in investing and I am not sure if they will have repeat success. This compares to 1% to 3% of float shorted for many of First Majestic’s peers, thus making it a good target to force a short squeeze. The reason for targeting this stock is the concentrated short position at 23% of outstanding shares. Besides buying physical silver, silver ETFs and standing for delivery on silver futures, their first silver stock target is First Majestic Silver (AG). They are looking for ways to squeeze those that are massively short silver and have been manipulating prices for years. Here is a quick snippet of the original post to give you an idea: THE BIGGEST SHORT SQUEEZE IN THE WORLD $SLV Silver $25 to $1000 But it was too late and the idea has spread like wildfire. Reddit first took down the entire subreddit and then the moderator of the group decided to delete the post. What caught my eye was the first post in this Reddit group to suggest targeting silver and silver stocks for a potential short squeeze. I’m not shedding a tear given the history of these funds taking advantage of retail investors and requesting bailouts from taxpayers when their bets soured. But I think this is a significant event with retail investors organizing to beat Wall Street hedge funds at their own game. I’m also not particularly bullish on GME or AMC, as I think they have antiquated business models and have failed to innovate fast enough. And while I have a soft spot for Dogecoin, this really wasn’t a trade that I could get behind as it is a meme coin and there are dozens of better cryptocurrencies with real-world use cases, high utility and larger/more active communities behind them. Wall Street Bets investors then took to Twitter, mentioning the crypto meme coin DOGE, sending it more than 800% higher in a day.
#Silver short squeeze free
While I appreciate the firm forcing the industry to adopt free trades, it was never ethical to sell user data to hedge funds that scalped profits at the expense of individual investors trying to generate returns for their families.Īnd the irony of a company with the name Robinhood helping the rich steal from the poor/middle class is not lost in this chaos. The SEC has signaled an investigation over the firm blocking stock buys. There have been widespread calls by lawmakers on both sides of the aisle to investigate Robinhood restricting trades. For this reason, we support the movement to #cancelrobinhood and think it is wise to move funds off that platform and use an alternative like Fidelity, TDAmeritrade, Webull or CashApp. In this case Robinhood investors are not the customers, but the product, as they sell customer order-flow data to large funds like Citadel that can use the info to literally steal from unsuspecting retail investors. They did this under the guise of protecting investors, but it seems clear they were really protecting their true customer, Citadel, which has ownership in Melvin Capital. Robinhood then went so far as to not allow buying, only selling, of shares in GME, AMC and others. By pooling together resources and buying up shares, they effectively forced a short squeeze and in the process caused billions in losses for hedge funds, putting Melvin Capital out of business and inflicting heavy losses on their backers, including Citadel, which is known to buy order-flow data from Robinhood to front-run retail investors.
Reddit investor “Roaring Kitty” briefly turned $53,000 into $48 million, managing to use social media and community investing to squeeze leveraged shorts. The later did the same with the AMC Entertainment Holdings (AMC), which rocketed over 300% higher in a single day last week. They specifically targeted GME due to the high percentage of shorts against the stock. By now you have probably seen this crazy phenomenon happening where a growing group of retail investors on Reddit called Wall Street Bets has been largely responsible for pushing up the share price of Gamestop (GME) from $20 to $350.
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