It depends entirely on how the funds squeezed are funded. If they are made up of your 401ks, then basically you have paid money to someone to lose money for you. This does not appear to be the case for funds like Melvin Capital.
The other way is if the funds in question do a massive selloff elsewhere to cover for these losses. So you get hit by 2nd and 3rd order effects, as your other stock prices tank. This only happens of they reach a point where they need to raise cash instantly. I dont think this appears to be the case yet either, since the prime culprit, Melvin Capital just got bailed out.
It depends entirely on how the funds squeezed are funded. If they are made up of your 401ks, then basically you have paid money to someone to lose money for you. This does not appear to be the case for funds like Melvin Capital.
The other way is if the funds in question do a massive selloff elsewhere to cover for these losses. So you get hit by 2nd and 3rd order effects, as your other stock prices tank. This only happens of they reach a point where they need to raise cash instantly. I dont think this appears to be the case yet either, since the prime culprit, Melvin Capital just got bailed out.
Didn't they just get bailed out but then jumped right back in?
From the looks of it, yes. But they told CNBC thet got out, however trackers still indicate GME stock is overshorted.
Then absolutely positively they shouldn't cry about a taxpayer funded bailout.