Dan Ferris on meme stock traders "sticking it to the man"

Sticking it to the man feels good, I think, but sometimes it doesn't go the way you think it'll go.  What I'm talking about are all these people who are still buying and holding and promoting meme stocks...  They act like they are some part of a social movement.  These stocks became meme stocks because they were heavily shorted, they're terrible businesses.  They're going out of business: AMC, GameStop, Bed Bath & Beyond.  They're going out of business, so they're heavily shorted...  They were heavily shorted and they were squeezed by all these retail traders at home.

So they think they're going to keep doing this.  They think they've learned how to create short squeezes... but they're really just looking in the rearview mirror.  They're not going to do it anymore.  Or if they do, it'll have a short life, the way the Bed Bath & Beyond squeeze went recently: up 500% and then, boom, back down almost to where it was before they started.

The reason why I'm just really skeptical of all of this, they think they're sticking it to the man and the man was a hedge fund called Melvin Capital, which is out of business.  They were shorting... one or two of the big meme stocks and they lost a whole ton of money and they wound up going out of business.  And Citadel, this big hedge fund firm, is also a market maker.  They have this company called Citadel Securities and they make markets in stocks.  In fact, they handle more retail order flow than any other market making firm.  So sure, maybe the Citadel hedge fund lost a little bit of money shorting these meme stocks, but Citadel Securities loves this because they're handling all the order flow.  There's a big billionaire, Ken Griffin, behind all this.  I think he's worth $20 or $25 billion... and he's loving this!  So if you think you're sticking it to the man by being long AMC or GameStop, you're not!  Ken Griffin is saying, "Man, I love being the man.  I love having it stuck to me to the tune of billions of dollars."  And of course, last year Citadel Securities did record revenue, more than $7 billion.

~ Dan Ferris, "Navigating Today's Economic Battlefield," Stansberry Investor Hour, 0:40 mark, August 29, 2022