My friend and I have done a deep dive on the liabilities being created by these insane short squeezes.
What I think we’ve uncovered is that if these short squeezes continue and bankrupt the hedge funds who sold them, the positions will ultimately be the responsibility of market makers like Citadel Securities. And they are absolutely obliterating them.
That’s why they bailed out Melvin, because it’s their problem anyways.
Moreover, I believe we have uncovered is that the Citadel fund and Citadel Securities - both of which are owned by the same Griffin guy - only have (had) about $35-$40B of assets to their name collectively.
They’ve already had to bailout Melvin to the tune of $2B. And that was at GME $150.
That’s pretty wild considering CS’ total “record” revenue in 2020 was 6B.
I’ve also learned that short interest in GME is INCREASING, and this may not let up.
So what if GME actually goes above $500? That might sound crazy, but that’s a move from like $15B market cap to $35B market cap? We all know that’s actually possible in this market.
What if the short squeeze mania spills out into the other heavily shorted stocks?
Pretty concerning for CS because, I’ve also learned that Citadel Securities is responsible for processing about 25%-40% of ALL stock market transactions.
So uh. What if they go bankrupt?
I don’t mean to be speaking in extremes, but is this potentially a 2008 mortgage backed securities crisis type of situation?
Serious educated answers would be sincerely appreciated.
Submitted January 27, 2021 at 01:21AM by Troflecopter https://ift.tt/39iaCFo
