It seems to me the "we'll all get rich sticking it to the hedge funds" stuff was some combination of sincere belief and pure window-dressing to get more people to buy into the pump. And for the people left holding the bag, a way to feel better about their losses.
If you don’t have an actual exit strategy—especially on a time-dependent play like a short squeeze—you’re the sucker who’s losing their investment.
That was ingenious. Since tulip mania mob chased penny stocks in pump and dump schemes in order to make money. Giving class war narrative to the mob was revolutionary.
Hint: T+2 settlement in a time where a stock price is highly volatile means that brokerages are forced to pony up more collateral. Robinhood is such a bad brokerage, it didn't have the funds to do so and was cut out by the clearinghouses.
Selling of GME would roll back the amount held by Robinhood, lowering collateral.
(What, like institutional investors never use social media to manipulate markets? Legal or not? Now you see why it's not crazy for the FTC to investigate wsb, right?)
But I think there is still a story here about why the "class war" narrative was so effective and popular... there is clearly an appetite for some class war... that can be used to manipulate people, or...?
Mudrick Capital Management shorted GME at the peak and made at least $200 Million from the whole event. Mudrick Capital also benefited from AMC, to the tune of hundreds-of-millions.
They didn't even punish the shorts: a lot of shorts sold at $300 or $400 and made bank.
This is the narrative. It doesn't matter which narrative makes the most sense or is the most correct, it only matters which narrative spreads the most and the quickest. The narrative that wins will always be the victory narrative.