But wait, there’s more. As short sellers scramble to cover their position, an investor like Blackrock is in a good position to help with something called securities lending where "mutual funds lend stocks or bonds to generate additional returns for the funds." If you are a short seller that needs to cover your position, you can always ask BlackRock to borrow some of its GameStop shares, pay them a fee, and offer up collateral equal in value to the market value of the loaned GameStop share.
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GameStop’s current valuation will eventually pop, but even if it shoots down to $20 per share, the firms that own GameStop will still be in a better position than they were while a bunch of retail investors will probably flame out.The same is more or less true for other companies being pumped by WallStreetBets. They may have netted pretty returns on AMC by pumping up the stock, but its major investors are private equity firms, hedge funds, and asset managers like Silver Lake Group, BlackRock, Greenvale Capital, Vanguard Group, and Mittleman Investment Management. WallStreetBets may have wounded a few greedy hedge funds, but it’s also (for now) stuffing the pockets of some while further enriching other shareholders that will lend securities to hedge funds who were stupid enough to double down on shorts or enter the position without any sort of hedge.
GameStop’s current valuation will eventually pop, but even if it shoots down to $20 per share, the firms that own GameStop will still be in a better position than they were while a bunch of retail investors will probably flame out.At the end of the day, the stock market is still a glorified casino with none of the aesthetic value. That means you can walk out of there with $1 million, $100 million, or $10 billion, but as long as the house is still standing, the house is still winning. And if you look at the investors for these companies, it is very clear the house is still standing.