Hedge Funds Are Puking Longs To Cover Short-Squeeze Losses

Last night, we warned that, as hedge funds are squeezed on their shorts, they will likely be forced to sell their most popular and liquid longs.

Yet for once (it would appear), wallstreetbets is actually behind the market, because a quick look at some of the industry's favorite longs shows that they got hammered just as the most shorted names were soaring, as hedge fund sharks - smelling blood in the water - starting taking bites out of their wounded peers. Smid-cap hedge fund growth darlings like Roku, Peloton and Square tumbled as much as 6% on Tuesday as the short squeeze rampage entered into its third day. Not coincidentally, Bloomberg notes that Goldman's Hedge Fund VIP ETF which tracks hedge funds’ most popular stocks, slumped for a fourth straight day, the longest stretch since October even as the company's basket of most-shorted names soared 15% during the same period.

It appears we were on to something as Goldman Sachs is out with a note this morning warning of exactly this...

Hedge Funds Can Handle GameStop Short Squeeze: Schonfeld CEO

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