1/x I’m going to do something a little different today... everything from yesterday’s note still completely applies. There is only one important new factor to contemplate. Citadel & Point72’s bailout of Melvin Capital...This was undoubtedly done in part due to the preferential https://twitter.com/jam_croissant/status/1353642948840349696

2/x terms that our 2 beloved ’s received. But I think it would be a mistake to think that Ken & Stevie pulled the trigger as quickly as they did solely based on terms. After all, the term benefits are probably relatively small relative to 2 more important considerations that

3/x they clearly pondered. 1)what the immediate effects on their current books would be if they didn’t do the transaction vs if they did do it & 2)how they could use their ‘activism’ to proactively profit off of the deal. Given that the deal came together quickly, this tells me

4/x that they likely benefited from both sides here as well, as the favorable terms. In particular, we all know Stevie’s penchant for taking advantage of ‘informational asymmetry’ &, seeing as he likely spearheaded the effort given his relationship w/ Gabe Plotkin, I think it’s

5/x fair to assume there were some significant short positions taken after the open in Melvin short names like GME. I think the strange morning sell off & the 1/1 correlation w/these names was not a coincidence yesterday... I’m sure word traveled fast re what was going on early &

6/x led to a pressing of shorts on these names on the back of the clear signal from these 2 that they’d be providing firepower. In the end, this amounts to classic ‘soft’ street coordination, & really isn’t any different than what’s happening on r/WSB but on a much bigger scale..

7/x So, in the end r/wsb got a bit of their own medicine...& I’m guessing the SEC is knowingly turning its cheek...This leaves me w/2 big takeaways here.1) none of this would’ve happened w/out at least tacit approval from the SEC. & given Stevie Cohen’s relationship & optics here

8/x I wouldn’t be surprised if that’s a major reason why Citadel was in on the deal from the get go. Given this, I’d expect that there’s also some imminent regulation or oversight coming down the pipe from the SEC on the semi coordinated retail call squeezes that are going on &

9/x hence potentially even a bigger payout for our 2 as the names decline more..& 2) now that all 3 of these HF’s are essentially cooperating & likely have at least partial transparency into 1 another’s positions in these names, I’d expect in great likelihood this relationship

10/x to work to @ least partially counteract further retail coordination. So, what does this mean? It means if you’re playing the call pump game on well known short squeeze names, THE JIG IS UP! Be careful. & it also means that w/out as much retail firepower in those names there

11/11 could be some important potential knock on effects in those sector’s that have benefited from those retail call flows, & eventually possibly even for the market writ large. Watch closely. That wasn’t just any deal...Good Luck!