#MemeMarkets: Meme stocks soar on bad news for Melvin Capital and Russia’s invasion of Ukraine

Griffin infused Plotkin with the cash at the height of January’s 2021 short squeeze on meme stocks, a move that Apes saw as one Wall Street fat cat bailing out another.

The details of that deal further incensed retail folks when they considered that Griffin is also the founder Citadel Securities, which is the largest executor of retail trades on apps like Robinhood
HOOD,
+5.99%
[which you might remember played a key role in shutting down the hectic short squeeze].

Griffin has denied any deeper ties with Robinhood or that he was bailing out Plotkin, but that didn’t stop Apes from beating their chests on social media Thursday as they reacted to news that their version of Emperor Palpatine was clawing back $500 million from their version of Darth Vader.

And while Plotkin’s losses have been large and public, some even speculated that this was more about Citadel’s problems than Melvin’s.

“Citadel appears to be afraid of incoming margin call defaults,” mused popular retail investing influencer @BossBlunts1 on Twitter.

While there is scant evidence of a liquidity issue at the $230 billion hedge fund, Griffin’s Citadel empire does seem to be having a less-than-comfortable start to 2022 with a series of regulatory investigations into short-selling and block trading coming to its door and one of its hedge fund executives even being named in one of the probes.

Whether that has affected the sometimes-pugnacious billionaire who has trolled his retail critics a few times in the last few months, it definitely makes it hard to call the latest investigations “a bad comedy joke” as he did with an SEC investigation into the January 2021 squeeze.

But the Griffin/Plotikin drama was just one element of a hectic day as retail also appeared to factor in Russian President Vladimir Putin’s military strikes on Ukraine as another sign that they could benefit from a major pullback on equity markets and a potentially a delayed hike of interest rates from Federal Reserve Chairman Jerome Powell.

“We know a massive market downturn is a catalyst for the MOASS [mother of all short squeezes],” read a post from user jdrukis on subreddit r/amcstock. “No ape wants such an event to be at the cost of real lives. For us, seeing a little red in our portfolios is nothing new and it will pass quickly. For those who woke up this morning to conflict, seeing red in the streets is going to be something they can’t just count on going away.”

But the uncertainty created by Putin’s military action is a perceived gift to the Apes, who have indeed long believed that market shrinkage would dry up a deep pool of synthetic shorts that they contend have artificially delayed meme stocks from “mooning.”

That theory appears to have been alluded to in a recent tweet from GameStop chairman/activist investor/memelored supreme Ryan Cohen:

It also plays into the retail hope that more market pain from Russia’s invasion —even without Western sanctions on the all-important SWIFT payments system— will keep Powell from his aggressive rate-raising schedule in 2022, and keep the cheap money train rolling for retail investors to keep HODLing their favorite names.

Even Goldman Sachs appeared to give some oxygen to that hope Thursday, pegging back its odds that the Fed raises 50 basis points in March.

Regardless, Thursday was a good day for meme stocks even if was a bad day for humanity, a fact that was reflected in jdrukis’ conclusion to his Reddit post.

“Ukraine, I’m sorry this is happening. Hedgie, I’m not sorry about what’s going to happen to your business model soon,” they wrote. “Hold the line, we moon soon.”