Alexis Ohanian tells AOC short selling is ‘a b***shit way to make money’
‘Conceptually right, you’re basically betting a company will fail’
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Your support makes all the difference.Alexis Ohanian, the co-founder of Reddit, has said he supports the WallStreetBets investors who are using his site against hedge funds, calling short selling a “bulls**** way to make money.”
Mr Ohanian told Democratic representative Alexandria Ocasio-Cortez during a Twitch interview on Thursday that short selling is “weak” and that he had never shorted a stock.
“Conceptually right, you’re basically betting a company will fail. You will make money when the company’s share price goes down,” he explained.
Reddit recently found itself at the centre of a stock market battle as investors from a WallStreetBets forum attempt to "short squeeze" a group of hedge funds attempting to short GameStop stocks.
Mr Ohanian said he thinks that an “honest American way to make money” is to grow a business that creates value for them, for their employees, for customers.”
“So, if you ask me, I actually think hedge funds, or even the practice of short selling, its kind of, its a bulls**** way to make money,” he said.
He added: “But to do it in such an insanely leveraged way where you're—you know, they were able to reach numbers where they weren't able to short more shares than even existed.”
Reddit investors grouped together to buy up GameStop stocks, sending the share price soaring more than 2,000 per cent over the last month.
The move could force short selling hedge funds to have to buy back their GameStop stocks at exorbitantly inflated prices and they stand to lose billions of dollars in the exchange.
Investment app Robinhood blocked users from buying GameStop, AMC, and other stocks on Thursday, prompting a backlash from politicians and celebrities across the political spectrum.
The company released claimed in a statement that the decision to restrict transactions was due to “significant market volatility” surrounding companies promoted on the forum.
“This is unacceptable. We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit,” AOC tweeted.
Mr Ohanian told CNBC's Squawk Box on Thursday that he hopes the GameStop short squeeze will open financial leaders' eyes to the resentment felt by those who think they have been fenced out of growing their wealth.
“I do think this is a seminal moment. I don’t think we go back to a world before this because these communities, they’re a byproduct of the connected internet,” he said. “Whether it’s one platform or another, this is the new normal.”
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