Posted: 2 February 2021
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Before we dive into this article, I urge all readers to act with extreme caution. The purpose of this article is not to encourage highly speculative behavior that is often seen on on r/wallstreetbets. Rather, this week’s saga is meant to be a case study for educational purposes only. I am by no means an expert on this topic and have penned down the below article based on what I have read and understood in a limited amount of time. While some details may be lost in the timeline, I try to capture the essence of what has happened and stand to be corrected if any significant development that runs counter to this article’s argument, as of 31 January 2021, were omitted. Please feel free to comment below if I have omitted any.
Full disclosure, I am not in on any of these trades and I am not affiliated to any buy-side firms/establishment/etc. These opinions were formed purely based on my reading and understanding of the information and data out there. Before making such trades, I urge that you read till the end of this article. Please only put down money that you can lose and always do your own due diligence.
Quick Rundown of What Happened Last Week
This week we witnessed the story of Wall Street versus Main Street in the financial markets, where the individual retail investors took on the large institutions. In case you have missed it, here’s what happened in a nutshell (read the entire post for more details):
- Hedge funds have bets that the share price of a video game retail company (GameStop (NYSE:GME)) will go down. If the share price falls, they profit; if it goes up, they lose money on their bets.
- A short-selling research firm, Citron Research, published a tweet about the live stream that was meant to unveil the short thesis against GME. During the Twitter live stream, Citron’s twitter account crashed several times and it eventually got the word out via YouTube.
- A bunch of retail investors (the wallstreetbets ‘degenerates’, as they would call themselves) noticed that if enough people bought GME shares, the market would quickly turn illiquid, i.e. the number of shares traded publicly becomes increasingly fewer. This should drive share price up exponentially as it becomes increasingly harder to buy shares at a lower price. Hence, they banded together and kept buying up GME shares. GME share price started spiking from US$9 to US$14, then again from US$14 to US$20.
- As the share price rose and the short sellers started bleeding, they were forced to close off their positions by buying shares (see short selling mechanism below). From 12 January 2021 to 13 January 2021, we saw the first doubling in share price (US$20 to c.US$40) after ~8 million of short interest shares were closed out.
- From 19 January 2021 to 25 January 2021, the share price doubled again to US$80 as more traders caught wind of what was happening. Share price double again to c.US$150 a day later when billionaire Chamath Palihapitiya tweeted that he bought US$115 call options, and again to c.US$350 on 27 January 2021 when Elon Musk tweeted “Gamestonk!!” and another ~5 million short interest shares closed out on the same day (supposedly Melvin Capital’s short interest shares) (A more complete rundown on the sequence of events from Bloomberg is available here)
- According to Bloomberg, Steven Cohen’s Point72 Asset Management declined 10% to 15% this month, while Sundheim’s D1 Capital Partners, one of last year’s top-performing funds, is down about 20%. Melvin Capital has lost 30% through Friday (29 January 2021) . US$2.8 billion Candlestick Capital has fallen 10%-15%, US$3.5 billion Maplelane Capital lost about 45% by end of day Wednesday.
- According to CapitalIQ, 61.8 million short interest shares remain outstanding, representing 88.7% of the shares outstanding as of 2 February 2021 (free, publicly available data accessible here).
- Andrew Left of Citron Research had received death threats and decided to close out the short position. Citron has also since withdrawn from ever publishing short selling research and will instead pivot towards Long-only thesis in the future (see WSJ article).
- While the masses celebrate the tiny guy “winning” and the media continues to publicize the losses of these hedge funds, I think there is far more than what meets the eye. (Read till/jump to the end of this article to see my views on this)
Context and Terminologies
Simply put, shorting a stock is the opposite of buying a stock. Typically, when investors buy shares of a company, they are betting that its share price will go up for them to make a profit on their investment. Conversely, a ‘short’ position is a bet that share prices will go down.
- An investor (short seller) borrows shares and sells them on the open market, hoping that share prices will fall. The short seller profits when he manages to buy back these shares at a lower price to return to the lender, and vice versa.
- To close the short position, the investor simply buys back the shares (long) and returns it to the lender.
- During the borrowing period, if dividend is declared and the short position remains on the ex-dividend date, the short seller is not entitled to the dividend and is required to pay the actual owner of the shares.
- To borrow and short sell shares, the investor must set up a margin account due to the high delivery risk (risk of a counterparty not fulfilling his end of the bargain). In essence, a margin account acts as a safety net for the brokerage firm – a safeguard for any scenario where the borrow is financially unable to repurchase and return the shares.
- The investor must fork out an initial margin of 150% of the value of the short sale (to be placed as a “deposit”). On top of the initial margin, there are also maintenance margin requirements for short sale (typically 30% - 40% of the short sale value), which adds an additional protective measure that improves the likelihood that borrowed shares will be returned.
- For example, if Alice wants to short sell 1,000 shares of X Co at $50, Alice has to fork out 150% of $5,000 ($50 * 1,000 shares), or $75,000, as the initial margin.
- As the share price increases to $55, the maintenance margin is 30% of $55,000 ($55 * 1,000 shares), or $16,500. Hence, the total margin requirement is $55,000 + $16,500 = $71,500. Since the initial margin of $75,000 is more than $75,000, it is deemed to be sufficient to cover this short position.
- However, as the share price increases to $60, the maintenance margin increases to $18,000, or 30% of $60,000 ($60 * 1,000 shares) and the total margin required increases to $60,000 + $18,000 = $78,000. Since the initial margin ($75,000) falls below the required margin ($78,000), it is now deemed to be insufficient and Alice will receive a margin call for the margin account to be topped up back to the required margin level.
- Margin calls will continue to happen to ensure sufficient coverage if prices increase indefinitely. When the investor becomes unable to meet the margin call, the brokerage has the right to close out any position without prior approval from the investor. Since the total margin requirement will exceed the current value of shares that needs to be returned, this helps to reduce delivery risk on short sale.
To sell shares that you do not own or have not borrowed. Many exchanges prohibit naked short selling as it can impose heavy downward pressure and make share prices highly volatile / speculative. SGX slaps traders with a S$1,000 fine if traders commit a naked short and SGX is unable to buy back in on your behalf after 3 days.
A ratio that is indicative of how heavily a stock is being shorted. It is calculated as the number of SI shares divided by the average daily trading volume. The higher the short interest ratio (expressed in no. of days), the more heavily a stock is shorted.
A subreddit thread where a community of like-minded individuals hold discussions on the financial markets, specifically on highly speculative trading ideas and strategies.
The language used on posts in the community is crude and the subreddit has developed its set of lingo over the past 8 years (since its creation). Here are some examples of non-explicit lingo unique to this community:
- “Bagholder” which refers to someone who holds stake in a equity that has decreased significantly in value (much like many First REIT holders)
- “Tendies” = gains/profits made on an investment
- “Rocket Ships. Andromeda and To the Moon” = to express belief that the security or stock mentioned will have a dramatic gain in value
- “DD” = double-down (i.e. to place all your money on the bet) or due-diligence
Background: The Business Model of GameStop
For context, GME is a physical (brick-and-mortar) retailer that sells new and pre-owned video game hardware, physical and digital video game software, gaming accessories and mobile and consumer electronics products and merchandise. It is present across the United States, Canada, Australia and Europe. Its product range include items such as Sony and Microsoft gaming consoles (PlayStation, Xbox) and physical units of gaming titles from video game companies like Electronic Arts (EA).
Over the past 5 years, the company has underperformed massively with its revenue declining from c. US$9.4bn in 2016 to US$6.4bn in Feb 2020 (pre-covid mostly). Its EBITDA had also seen a massive decline over the same period from c.US$800m to c.US$100m.
Consequently, its dying business model (which is increasingly ceding market share to digital gaming copies / online gaming retailers) became a huge target board for short sellers. Many have piled in on this trade to make a quick buck and squeeze the company dry.
However, things started looking up for the company following the wave of good news in the past two years.
Setting the Stage for the Parabolic Move - The Wave of Good News
i. Michael Burry invests in GameStop
Prior to the parabolic surge in GameStop’s share price, GameStop had seen several waves of good news. This started with an investment from Michael Burry, the founder of hedge fund Scion Asset Management (“Scion”) who was famously featured in Michael Lewis’ book, “The Big Short”.
Burry’s play was to urge GameStop to use its cash to buy back stock and potentially retiring half of its share outstanding. On 16 August 2019, Burry sent a letter to the Board of Directors of GameStop to direct the full execution of its US$300 million share repurchase authorization. He rationalized that GME had over US480 million of cash, which was “more than enough to complete the share repurchase authorization and still invest in the business and pay down debt”. At the time of this letter, GameStop’s market capitalization of only US$310 million (vs. the remaining US$237.6 million of buyback authorization). At this point in time, Scion and its affiliates owned a total of 3 million shares, or 3.3%, of GameStop common stock. According to reports by Bloomberg, the short interest as of 31st July 2019 stood at 57,226,706 shares, or c.63% of the 90,268,940 outstanding shares. (Read Scion’s letter to GME’s Board here, original source here)
ii. GME starts buying back shares
From October 2019 through to October 2020, GME bought back approximately 135 million shares. By April 2020, Scion Asset Management disclosed that it had accumulated 5.3% of GameStop at between US$2 to US$4.2 a share, totaling US$15 million. This set the stage for one of the wackiest trades in recent financial history.
iii. Ryan Cohen’s RC Venture invests in GameStop
Later, on 31 August 2020, GME’s share price surged 27% as RC venture’s filings revealed that it had taken up a 9% stake in GameStop. This made RC Ventures the third largest investor in GameStop, behind Blackrock and Fidelity. Ryan Cohen had famously sold his company, Chewy.com, for US$3.35 billion in 2017 after it successfully went toe-to-toe with Amazon to emerge as the market leader for online retail in the Pets industry. GameStop was Ryan Cohen’s “next big play”. Cohen’s joining was extremely timely as the largely brick-and-mortar video gaming retailer had desperately needed someone who knows how to run an online retailer to help expand its online presence.
At this point, GME was going at US$6.68 per share.
iv. Announcement of Next-generation consoles
Following Ryan Cohen’s joining, Sony and Microsoft also announced that they will be releasing their next-generation gaming consoles, the PlayStation 5 and the Xbox Series X. This signified the start of the next gaming super cycle, where consumers refresh their existing consoles and gaming title sales start to pick up.
Just a month later, on 16th September 2020, a Redditor with the handle “Player896” published a post on r/wallstreetbets entitled “Bankrupting Institutional Investors for Dummies, ft GameStop”, outlining a bullish turnaround case for the brick-and-mortar video gaming store.
i. The Investment/Trade Thesis – The Short Squeeze of the Decade
Player896 outlined a few fundamental trends and turnaround business strategies that could act as catalysts to push GME’s share price higher. These include (1) a new console super cycle, i.e. new next-generation gaming console to drive console sales and gaming title sales; (2) preference for physical copy of the gaming titles over digital copies as they can be resold; (3) Expansion of its online channel (ecommerce & mobile app); (4) onboarding Ryan Cohen, the co-founder of an online pet retailer (Chewy) which was sold for US$3.4 billion, to help with its digital transformation; and (5) BUY recommendations from equity research analysts and interest from accredited investors like Michael Burry.
Perhaps more crucial to the central thesis of this trade was the short squeeze. At that point in time, GameStop had a 120% short interest, i.e. the number of shares sold short (yet to be covered) exceeds the total number of publicly traded shares. As margin calls start happening and short positions get closed off, the share price will be driven higher and higher.
Credit given where it is due, this is actually a brilliant strategy. Riding off the back of consecutive positive news release on a potential turnaround also helped more people to buy this the idea with greater ease.
What is a Short Squeeze?
A short squeeze happens when a short seller is unable to meet the margin call and is forced to cover its position. Either because the market has gain so much upward momentum (i.e. rising very quickly) or it is highly illiquid (i.e. not many shares traded and therefore less people are selling = offering increasingly higher prices to attract sellers), the act of buying back pushes share price significantly higher, which can create a feedback loop that pushes share price even higher.
Beyond the Short Squeeze, and into the Gamma Squeeze
To appreciate the next part will require a bit of understand of how options work so here’s a quick primer:
What are options?
An option is a form of financial contract (derivative) that gives the buyer the option to buy or sell an underlying asset at a specific price (called strike price) on or before a certain date in the future (expiration date). The underlying asset can be a stock, commodity (like gold and silver), index, currency or even other derivatives.
When you buy (long) an option, you pay the option seller a small fee (called “premium“) to compensate the seller for granting you the rights to buy/sell in the future. There are two types of options: (1) call options, and (2) put options.
Call options give the buyer the right to buy an underlying asset at a specific price (strike price) on or before a certain date. There are two positions to take with call options — (1) Long, or (2) Short.
The Long Call Position
If you long a call option, you gain as the price of the underlying asset (underlying price) increases. For example, I pay $5 for a call option that lets me buy shares of Apple at $200 within the next 3 months when its share price is currently $130. The option seller is willing to sell me this contract and pocket the $5 because he thinks that Apple share price will not hit above $200 within the next 3 months.
However, if Apple’s share suddenly surges to $220, I can exercise the right under this contract to buy Apple shares at $200 from the call option seller. When I sell the shares to the open market, I get to earn $15 ($220 – $200 – $5). In this case, we say the call option is “in-the-money“.
The Short Call Position
If you short a call option, you are the seller of the call option in the above example. If Apple share price stays below $200 for the next 3 months, the buyer will have no incentive to exercise the call option to buy Apple shares from you at $200 a share. Hence, you get to pocket the $5. In this case, we say the call option is “out-of-the-money (OTM)“.
Put options give the buyers the right to sell an underlying asset at a specific price (also called strike price) on or before a certain date. Similarly, you can go long or short on put options.
The Long Put Position
If you long a put option, you gain as the price of the underlying asset (underlying price) falls. For example, I pay $5 for a put option that lets me sell shares of Apple at $70 within the next 3 months when its share price is currently $130. The option seller is willing to sell me this contract and pocket the $5 because he thinks that Apple share price will not go below $70 within the next 3 months.
However, if Apple’s share suddenly drops to $50, I can exercise the right under this contract to sell Apple shares at $70 to the put option seller. Compared to selling my shares on the open market, I get to earn $15 ($70 – $50 – $5) more because of this put option. In this case, we say the put option is “in-the-money“.
The Short Put Position
If you short a put option, you are the seller of the put option in the above example. If Apple share price stays at $130 in the next 3 months, the buyer will have no incentive to exercise the put option and sell you the shares at $70. Hence, you get to pocket the $5. In this case, we say the put option is “out-of-the-money (OTM)“.
While some have bought into the shares of GME directly, many others (like billionaire Chamath) sought to gain exposure by being long call options. As we discussed, when you long call options, someone else must have sold this “contract” to you. Often, these are market makers. These entities make markets by selling options to people that want to buy them, and buying from people that wants to sell them. They make money by matching the differences between the buy and sell orders.
Call options sellers buy the underlying asset to hedge against massive losses
When a huge volume of buyers look to buy call options, as in the case of GameStop (and Tesla), the market makers who sell these call options will want to hedge their risk because leaving them exposed could result in massive losses. And they do so by buying shares of these underlying stocks to create a “covered call“.
In essence, this caps the maximum losses that the call option seller will experience. Without buying the underlying stock, call option sellers could theoretically be exposed to infinite losses as share prices can rise infinitely higher (as seen the downwards slope on the right diagram). However, by buying the underlying stock, the call option seller’s payoff now looks like the blue line — i.e. losses are capped (as seen from the flat line as stock prices increases).
Covered Call Strategy (Long stock + Short call)
Delta/Gamma Hedging and Gamma Squeeze in Plain English
Market makers calculate how many shares to buy as hedges based on the “Delta” of the options they sold. The higher the Delta, the more shares they have to buy to hedge. The closer an option is to being “in the money”, the higher the Delta. Gamma is the rate of change of Delta. The closer the underlying price gets to the strike price, the higher the Gamma.
If a market maker sells a bunch of far out-of-the-money call options, it only has to buy a small amount of shares to offset the risk (as delta is low). However, as share price increases, delta and gamma rises. This means that delta increases at an increasingly faster rate and the market maker will have to buy increasingly more shares to hedge its position effectively.
This creates a feedback loop (much like a short squeeze) as the stock price gets closer to the strike price. This is known as a “Gamma squeeze“. Combining this with the more widely publicize short squeeze and we have ourselves the incredibly explosive movement in share price as witnessed in GameStop.
The Parabolic Move to the Moon, and some say Mars
Retail interest in this trade gained traction and snowballed as more and more people piled in on the trade by either buying the shares of GME or the call options on GME. As the share price started to go up, some short interest were forced to close out their positions as they suffered more and more losses. To close their short position, they had to buy from the open market, which drove share prices via the short squeeze mechanism laid out above. Simultaneously, a gamma squeeze also help to push prices higher. This was seen when GME’s share price started to experience a parabolic rise, from US$20 to US$40, then to US$80, US$150, and finally to US$325 (as of 31 January 2021).
As of 31 January 2021, the amount of short interest shares has fallen from 83.6 million, or 120% of shares outstanding, to 61.8 million, or 88.7% of shares outstanding. As many continue to cheer on the little guy’s victory over the establishment, the wider second-order consequences are getting less attention from the media (traditional and social media alike).
Second-order Consequences could Mean Crashing the Wider Market?
On the face of things, the tiny guy has won but I want to dig deeper and find out what the second-order consequences are or will be.
As you read (and I write) this article, other companies in a similar position as GME, such as Bed, Bath and Beyond (BBBY), AMC Networks (AMCX), National Beverage Corp (FIZZ) and more, have also become targets for this maniacal and highly unnatural squeeze. In fact, silver squeeze is becoming the next big target for the twitter community as “#silversqueeze” starts trending. This comes after it was revealed in 2010 that J.P.Morgan has a massive short position in silver and a silver squeeze could potentially collapse the institution. J.P.Morgan has reportedly covered this position and built a stockpile of silver since then. (I will not discuss this due to the lack of familiarity / research)
i. Hedge funds are de-grossing but gross leverage remains high, signifying continued short interest
This episode of short squeezes has caused many hedge funds to cut risky bets by a process called de-grossing (selling longs, covering shorts). However, Morgan Stanley’s prime brokerage unit has commented that hedge fund selling has yet to reach levels that signal the cycle is over. Morgan Stanley also adds that historically, there has been continued active de-grossing that occurs after the initial shock. As day traders wage war on heavily shorted stocks, professional speculators have been forced to dump holdings on the long side of their portfolios.
Others have been, and will likely continue to be, compelled to sell some of their profitable long positions, with the inclination to dispose of their most liquid ones. This has produced the worst week for the S&P 500 Index since October 2020, which begs the question of what will happen if this short squeeze trend continues.
According to Bloomberg, client de-grossing at JPMorgan Chase & Co also “seemed limited, with 4-week flows having yet to register as a 1 standard-deviation event” (i.e. in plain English, no extraordinary movement has occurred). Looking at the chart below, Morgan Stanley also suggests that if more squeezes occur, a greater degree of de-grossing is to be expected.
ii. Spooked markets, further de-grossing and fund closure could spell bigger trouble for all
While the basket of most-shorted stocks has increased significantly in value, the basket of hedge fund favorite stocks has headed in the opposite direction, recording the worst week since October 2020. As chief equity strategist of MAI Capital Management, Christopher Grisanti, puts it, existential questions may arise for some in the hedge fund industry. The markets have been spooked and have poor visibility over what the cash needs of the hedge funds are. Putting two and two together, if the “anti-establishment” movement continues forcing hedge funds to de-gross, this could drive the wider market further downwards.
Concluding Words: Buyers Beware
i. The Prisoner’s Dilmma
In short, the short sellers are not fully out, and the bulk of the short positions are just being transferred. To put things into the GME context, while hedge funds like Melvin Capital have reportedly covered their short positions, others will likely take their positions. This potentially explains the mere 26% fall in short interest shares despite an 8,000% increase since a year ago. Furthermore, despite the de-grossing, gross leverage (defined as short + long positions divided by asset under management (AUM)), which is a measure of the industry risk appetite, remains elevated which signifies that these rallies have attracted more short positions.
Soon enough, as the “buy and hold” or “HODL” maniac fades, this will likely turn into a prisoner’s dilemma scenario whereby it is to the benefit of all long-position holders to not sell, but being the first few to cash out brings the greatest benefit. As the first holders cash out, more gets hurt and this snowballs into a massive sell-down.
Those with call options will simply forgo their option premium and let their options expire. In the next phase, we could start witnessing delta/gamma hedges start to unwind and the market makers began to sell these shares (recall the call options sellers bought shares to hedge).
While some have bought into this based on the fundamentals, I believe some have bought in to stick it to the establishment and this is nothing more than a speculative bet for others. As seen from Bitcoin’s recent retreat from the US$42,000 high, misinformation about a double-spending problem that never occurred spooked many speculators to sell down the asset. When times are rosy, it is easy to present a united front, but once the pressure is on, fault lines will start showing. This is nothing more than human psychology.
ii. Consider the second-order consequences: Who is actually losing more?
Despite slew of good news over the past week such as FOMC meeting conclusively saying that more relief will be given, vaccination push will continue, interest rates to be kept near zero for the foreseeable future, and bond buying to be at least US$120 billion per month, the broader market has fallen sharply over the last week. This has spilled over from the Americas to Europe and Asia and will continue to do so if hedge funds continue de-grossing and the broader market becomes more fearful and uncertain. The market is a zero-sum game – for one to win, someone else must lose.
a. Short squeeze inducers win big, hedge funds lose big, others record temporary small losses
Initially, as this short squeezes army gains and hedge funds/short sellers lose, the act of de-grossing will put immense downward pressure on the wider market will also cause the other little guys (retail investors) to lose.
b. Further squeezes could shake the wider market
Should this short squeezing / gamma squeezing trend continue, hedge funds are expected to actively manage risk by de-grossing, causing an even larger decline in share prices in the overall market, causing even more harm to the other investors in the broader market. This will continue to push short interest to an all-time low.
c. The combination of further hedge fund de-grossing, delta/gamma-hedge unwinding and record low put hedges could crash the market
But what’s next? Sure, there may be further room to run upwards – given the fanatical, near-cultish followings of other investment like Bitcoin, Tesla or Ark Invest, I have no qualms that this could happen. But what happens when HODL-ing stops? What happens if short selling interest remains (as it has despite the 1,800% rise)? Institutional money will always far exceed even the combined money of retail investors/day traders. While we may see some hedge funds collapse, others that replace their short position could stand to make a handsome profit in time to come. Eventually, this could become a game of musical chairs where the last holder loses the most, and the short sellers still “wins” in the end.
Following a probable further de-grossing, if the music stops and traders start cashing in, share prices of these stocks will start to fall dramatically as existing holders rush to sell off and option sellers look to unwind their hedges. With the sharp decline in short interest in a spooked and falling market, put option sellers will increasingly look to hedge their position, which could send the market in the completely opposite direction (hedge puts by shorting stocks). All these could combine to make the perfect recipe for a financial market disaster.
This is how a doomsday scenario could play out in the financial markets because of such trades and this is why I do not encourage readers from partaking in this.
iii. Read everything with a pinch of salt
Lastly, please take everything you read with a pinch of salt. I say this even for my own article. Given the limited time I have had to understand things, this was an opinion formed under the impression of all the information I have consumed thus far, which is likely be far from everything there is to know.
Likewise, I see a great deal of misinformation out there that cheer on this David versus Goliath trade. Even reputable finance vloggers like Andrei Jikh can mistake hedge funds for being the guys that engage in leveraged buyouts (LBOs) that caused the bankruptcy of several companies including Toys”R”Us, when this is in fact the doing of private equity; Likewise, others have also blamed hedge funds instead of the banks for the 2008 GFC. I know, potayto, potahto, but the point being that there will be a great deal of misinformation out there as people seek to push their agenda, e.g. the more people buying into it, the more it benefits existing holders. I see this in the Bitcoin/crypto community a lot and the same sort of behavior can be seen here as well. Influencers pumping and exciting the crowd so that it helps boost the adoption of the idea.
While I do not want to conclusively rule this as a case of misinformation, the restriction of buying activity on Robinhood, IBKR and Webull was also a highly controversial topic. On initial inspection, I think this could just be the clearinghouses demanding for increasingly higher fees from brokerage, which they eventually cannot keep up with, and hence Robinhood had drawn on the line of credit (take a loan). But other theories have also surfaced alleging collusion and market manipulation by the hedge funds whom the brokerages were heavily influenced by. I will not go into further details for the lack of concreteness on what is the truth.
To me, the “David versus Goliath” narrative is overplayed and is nothing more than sensationalistic journalism written to capture the readers’ attention and drive ad revenues / subscription revenue for the big guys. While my heart goes out to all those who suffered dearly in the 2008 GFC (such as those that posted on reddit) due to the disgusting greed of Wall Street, I think we need to understand what the second-order consequences could mean. By being greedy and unnaturally driving heavily shorted shares up, we could inadvertently cause many others (often those with imperfect information/knowledge) to experience the same plight that Wall Street left them in 2008 – I am not sure how different this behavior is from those of the “top 1%” that they claim to hate so much. As Ray Dalio puts it best, this incident is but one of the many examples of the growing divide between the “Haves” and the “Have-nots”.
To conclude, I am neither for nor against anyone trading such shares, as to me this is purely the financial market doing its work. However, I urge all readers to consider the wider consequences before acting. If you do decide to speculate/make educated bets, please only play with whatever you can afford to lose.