The hope for the little boy, who we all are, is that one day hell will come for breakfast from the hedge fund tools that are very close to ruining baseball, the country and the globe. And at that point, through some inexplicable force that could only be karma, they would all have to work at Wendy’s so they could experience what a minimum wage really is. The system is too complicated for this reckoning to happen, and they have already bought and paid for anyone who may have made that change, but there is still hope. Hope is a good thing, perhaps the best thing, after all.
The canary in the coal mine would always be the Mets, of course.
After all, Mets was the only sports franchise to receive the Joan Collins Special by Bernie Madoff, who gave sports fans a glimpse into the sordid world of hedge funds / Ponzi schemes and internal chaos. The Mets were paralyzed for years by the Wilpon family’s losses in the Madoff case. Is this happening again? Probably not. But you can excuse Mets fans for having some flashbacks and taking a little blanket to feel safe.
If you haven’t seen it, and this is very unlikely, as it has been happening everywhere in the last few days, there was a kind of mini-uprising against one of those insatiable hedge funds in the last few days. Melvin Capital had been selling shares of GameStop – betting that the retailer would sink while fighting, especially during the pandemic, to continue. I’m not going to try to explain the whole concept of “short trading” because, like you, I tend to squint with that kind of thing. Also, if you’re interested, here’s an excuse to find the scene. The Big Short Where Margot Robbie explains this in a bathtub, which will be a much more pleasant experience for you. In the crudest possible terms, basically, these wealthy idiots are trying to profit from the end of a company.
Well, some Reddit users decided to fight back and started buying GameStop shares. And buying and buying. Seeing how it would raise the price, and that’s exactly what Melvin Capital didn’t want, they were a little boneless. And it got worse, because Elon Musk always makes things worse, and the whole thing has continued to feed on itself for the past few days. The end of the game was that Melvin Capital came out with their skis in the order of $ 3 billion.
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And that’s where the new owner of Mets, Steve Cohen, comes in.
Cohen’s Point72 Asset Management group is one of two funds that have come together to suck Melvin out with $ 2.75 billion to keep him afloat and hopefully survive the proletariat’s effort against them. It also took them out of the GameStop game (although some Reddit warriors are skeptical). Cohen’s company is “just” in it for $ 750 million at the moment, but you know how these things can work. GameStop’s shares are currently trading at about $ 320 per share, about 16 times more than on January 12, when it all started, and almost 50% higher since yesterday.
Cohen has already addressed this by calming the nerves of Mets fans, indicating that his baseball businesses and stakes don’t mix.
And this is probably true. $ 750 million is barely a fraction of Cohen’s total value, and that’s not how these things work, and he must be pretty sure. But it would be wonderful if he and the Mets were not. One of these days, these people will lose and lose a lot. And who loses more than Mets?