The Washington Post published an article on Saturday defending the hedge fund short sellers as the "good guys" of the GameStop short squeeze saga.
GameStop experienced a sudden, unexpected, and unprecedented surge in the price of its stocks last week after a number of users of the subreddit r/WallStreetBets realized that the stock was being shorted at more than 100% of its total market value.
"Their goal is to destroy the traders who link stock prices to fair value," wrote Sebastian Mallaby. "To suggest a political analogy, they are not just blindly devoted to their candidate; they deny the legitimacy of the opposition party. They are not just acting within the system; they want to overthrow the system."
Many of the investors who helped raise the price of GameStop stocks have argued that short selling, the process of betting against the success of a stock, is itself immoral. Some have suggested that it amounts to betting against the prosperity of your fellow man as a reason for this. According to its detractors, it goes far beyond ordinary stock trading, which has mutual benefit, to short sellers benefiting from the misery of others.
Mallaby, however, defended short selling, arguing "there is nothing evil about this. To the contrary, it’s a way of keeping prices honest. A market without short sellers is like a political system without investigative journalists."
"There is a difference between trading based on evidence and research and trading based on conspiracy theories and mob tactics," he finished.
Mallaby did not identify the conspiracy theories he referenced.
Other supporters of the users of r/WallStreetBets have argued that what they did was no less ethical than what traders on Wall Street do on a daily basis, noting that trading stocks is a risky game and the hedge funds which invested in GameStop just happened to lose out.
Other companies such as Robinhood have also faced criticism for prohibiting users from continuing to purchase stock in GameStop, which detractors have described as "market manipulation." Robinhood has financial connections to at least one hedge fund which has been financially affected by the GameStop short squeeze.
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