Hey
Intrigued for ideas on this.
If a load of hedge funds went to a room in a hotel and decided to short down a company until it crumbles do you think they would get away with it or would the SEC screw them?
I struggle with how this is different for the individuals who thought of this idea?
Everyone else has just jumped on the trade and there is nothing wrong with that because your trend is your friend right!
Hedge funds target companies to short that are doing poorly/failing business so they can make money. They also short stocks that they might consider overvalued.
Sometimes it works out for them sometimes it doesn’t. Like shorting blockbuster compared to shorting Tesla or shopify.
At the end of the day good companies will succeed and go up in price while bad ones will fail and the hedge funds make a profit. The natural market cycle.
Also hedge funds cannot coordinate their actions like the people on WSB, that’s illegal for them. So your analogy is a bit off.