The hope for the little guy, which all of us are, is that one day hell would come to breakfast for the hedge-fund tools that are pretty 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 salary is truly like. The system is far too rigged for that reckoning to ever come, and they’ve already bought and paid for anyone who might have made this change, but there is still hope. Hope is a good thing, maybe the best of things, after all.
The canary in the coal mine was always going to be the Mets, of course.
After all, the Mets were the only sports franchise to be given the Joan Collins special by Bernie Madoff, which gave sports fans a glimpse of the sordid hedge fund/Ponzi scheme world and the mayhem within. The Mets were hamstrung for years by the Wilpon family’s losses in the Madoff affair. Is it happening again? Probably not. But you can excuse Mets fans for having some flashbacks and reaching for a blankie to feel safe.
If you haven’t seen, and that’s very unlikely as it’s been everywhere the past couple days, there’s been something of a mini-uprising against one of those insatiable hedge funds in the past few days. Melvin Capital had been shorting GameStop stock — betting the retailer would go under as it struggled, especially during the pandemic, to keep going. I’m not going to try and explain the whole concept of “shorting,” because I, like you, tend to go cross-eyed with this sort of stuff. Also, if you’re interested, here’s an excuse to find the scene from The Big Short where Margot Robbie explains it in a bathtub, which will be a much more pleasurable experience for you. In the crudest terms possible, basically, these rich assholes are trying to profit off the demise of a company.
Well, some Reddit users decided to fight back, and started buying GameStop stock. And buying it and buying it. Seeing as how that would drive the price up, and that’s exactly what Melvin Capital didn’t want, they were kind of boned. And it just got worse, because Elon Musk always makes things worse, and the whole thing has just kind of kept feeding on itself over the past couple days. The endgame was that Melvin Capital was out over its skis to the tune of $3 billion.
And that’s where new Mets owner Steve Cohen comes in.
Cohen’s Point72 Asset Management group is one of a couple funds that banded together to juice Melvin with $2.75 billion to keep it afloat, and hopefully outlast the push against them from the proletariat. It also got them out of their GameStop play (although some Reddit warriors are skeptical). Cohen’s company is “only” in it for $750 million at the moment, but you know how these things can go. GameStop stock is currently trading at around $320 per share, some 16 times more than where it was on Jan. 12, when all this started, and nearly 50 percent higher from even yesterday.
Cohen has already addressed this by calming Mets’ fans nerves, indicating that his business and baseball holdings don’t mix.
And that’s probably true. $750 million is barely a fraction of Cohen’s overall worth, and that’s not really how these things work anyway, and he should be pretty safe. But it would be pretty wonderful if he and the Mets weren’t. One of these days, these people have to lose and lose big. And who loses bigger than the Mets?
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