Reddit co-founder Alexis Ohanian endorsed the stock-market revolution unfolding on his website while slamming hedge-fund investors who he said use “bulls—” tactics to make their money.
In a live-streamed interview with Rep. Alexandria Ocasio-Cortez, Ohanian said online traders like those in Reddit’s WallStreetBets forum have exposed the hypocrisy of a financial system that often gives Wall Street bigwigs too long a leash.
“I think there are far too many Americans now who are just far too fed up with how rigged the game has felt, continues to feel, and how John and Jill America end up having to pick up the tab when things go wrong,” Ohanian told Ocasio-Cortez during the Thursday evening broadcast on the Twitch streaming platform.
Ohanian’s remarks came after the Robinhood trading app blocked retail investors from buying shares of GameStop and other stocks touted by Reddit users whose prices have swung wildly in recent days.
The decision sparked outrage among day traders and lawmakers, including Ocasio-Cortez, who said it was “unacceptable” for Robinhood to block small investors from buying stocks while hedge funds could continue trading freely.
Ohanian agreed, saying the mass of online traders who have been pumping up GameStop were just engaging in the same kinds of crafty financial maneuvering that hedge funds get away with all the time.
He specifically criticized the practice of short-selling — betting that a company’s stock price will fall.
“Conceptually, right, you’re basically betting a company will fail. You will make money when a company’s share price goes down,” Ohanian said. “It’s a bulls— way to make money in my opinion.”
Ohanian noted that a Reddit user known as “Roaring Kitty” reportedly launched the GameStop rally by pointing out that investors had shorted more shares of GameStop than the company had available on the market, which Ohanian called “mathematically impossible.”
“Hedge funds do this all the time,” Ohanian said. “Hedge fund versus hedge fund is like headline news in business press. It’s Wall Street porn, hedge fund after hedge fund in these exact same situations.
“The difference is it was one clever person — Roaring Kitty with a YouTube channel — who shared his work with the world, publicly, and the people saw it and said, ‘Yeah, actually, I think you’re onto something, I agree,’ and then voted with their dollars.”