Could Retirees be Collateral Damage in GameStop War
The narrative that this current Wall Street war over GameStop has been between hedge funds and retail investors has almost always been BS. Avik roy noted on Twitter, “congrats to the Redditors (and hedge funds) who made money squeezing the shorts out of $GME. It was a smart trade. But the main beneficiaries were Fidelity, Blackrock, Vanguard, & Susquehanna. Woohoo!”
To make matters worse. Not only is the narrative wrong, but it could also be harmful to the very people these so-called “populists” claim to be defending. (CNBC)
Some hedge funds have sustained big losses as a result of bets against GameStop stock. Melvin Capital, for example, lost more than 50% in January.
But pension plans — which invest assets on behalf of workers like teachers and police officers — may hold big positions in hedge funds. That means a financial hit for hedge funds could spill over to workers’ retirement assets.