$GME And The WSB Short Squeeze

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During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed $GME And The WSB Short Squeeze. Here’s an excerpt from the episode:

Tobias: Do you guys have any thoughts on GameStop?

Bill: Yeah, I do. Allow me to–

Tobias: Is that your rant?

Bill: Yes. First of all, who the fuck do some of these people think they are, pouring fuel on the fire? Fueling this populist narrative that it’s the little guy versus the big guy, Chamath or whatever the fuck his name is, I don’t care if I just said it wrong, should have shut his mouth and not announced that he bought those calls. Then, he acts like he’s donating it to charity out of the goodness of his heart. No. The reason is compliance called him and said, “You better figure out a way to weasel out of this thing because you got a ton of followers and you’re running people straight to the fire and you’re cheering them on Twitter, and you’re pontificating about a bunch of shit you don’t know anything about.”

That guy needs to treat the responsibility that he has with a lot more respect than jumping up on some WallStreetBets BS, saying, “I’m going YOLO on some calls.” Not to mention, the people that he’s leading to the fire could actually be hurt, where he could lose all that money and it doesn’t matter because he’s going to get it all in SPAC fees, because his lemmings are going to give it to him. That guy has not bothered me until pretty recently. I find him very offensive right now, very offensive.

Tobias: There are a few guys jumping on that bandwagon. Davey Day Trader did that as well.

Bill: But he’s a [crosstalk] whatever.

Jake: Mark Cuban.

Bill: I think introducing populism and populist narratives into the market is extremely dangerous. I think that when you have 100,000, or 200,000, or however many freakin’ followers, that guy has–

Jake: Chamath’s like 1.2 million.

Bill: Yes, so whatever he has, I don’t care. I did look at some of his replies, he buys a lot of bots, but anyway.

Jake: [laughs]

Bill: The idea that he is rooting on the small guy bitching about payment for order flow, and SoFi does the exact same thing. How about you actually know your portfolio company? Slow your roll, man, you don’t need to have an opinion on everything.

Tobias: How does Robinhood work? They don’t charge you a fee, so rather than front running you– so this is another way they could be doing. They just make a wide bid-ask spread every time you want to trade, they’re just in between but they don’t do that either. What they do is they sell that front running to Citadel and they get a fee for giving them that data. Is that correct? Is that how it works?

Bill: Yeah, I think how it is, is they route it and Citadel gets the first look and Citadel knows if they can skim something and then they send it back, a little check. I do think that they have to give best order execution though. I’m not 100% sure how all that works, the internals. At the end of the day, the guy that was always going to be hurt here was the small guy, at the end of it. I wanted to buy, like this, oh, let’s all jump on Robinhood thing. I’ve got motivated reasons to believe that. I’m happy that I talked to some smarter people than me and they said, like, “There’s no way. There’s way too much volume. It’s got to be the big guys.” I just think that jumping on this bandwagon– We’ll see how it all gets totaled out, but I really fundamentally think that what some big names did in this whole story is really irresponsible. I know that I sound like an old man, but I really feel people don’t treat the responsibility that they ask society to give them with enough respect. I think that this was a really good example of that in a couple instances, and it upsets me greatly.

Jake: Yeah, I agree. Pretty gross behavior on a lot of fronts. I was surprised at how quickly it unraveled. Usually, it seems like it would take at least a couple weeks or something, but this was started and ended within before our last podcast.

Bill: It did.

Tobias: That’s internet time, I guess. We knew it was going on. Jimmy was sort of–

Jake: Yeah.

Tobias: I had Mike Burry as the gift for the Twitter promo last week.

Jake: That’s true. All right, we got two weeks’ worth of fun in it.


Tobias: I think it’s been going on for a little while. I think that retail really piled in between the podcast and now. Then, it broke down. It was right at the end of that parabola of whatever that shape is. What do you call a broken parabola?

Bill: Yeah, I don’t know.

Tobias: The South Sea Bubble formation. When the big move, the last stick is all the way up, and then it turns around, that does seem to happen very quickly.

Bill: The highest points the apogee, that I know.

Tobias: The apogee. There you go. The apex, the pinnacle.

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