🪶 $HOODwinked: The Story of the Robinhood Pump & Dump
A YEET Special Report Investigating $HOOD, the media, and market manipulation.
Hey! I’m @yourboymilt, and welcome to a YEET Special Investigative Report. This is a longform article diving deep into the $HOOD fiasco last week.
Creator/Editor:@YourBoyMilt The Architect: 🧠 Publishing Associate:@YourGirlRachie
Contributors: @jimengland, @suaracula, @mkt_sentiment
🎙 A foreword by @jimengland, resident Memeology Historian at The YEET:
It’s important to realize that the vast majority of Robinhood’s revenue comes from selling their customers’ data and order flow to Citadel. When GME mooned in January, Robinhood cut off buy order access on that fateful Thursday when we were undoubtedly headed to $1,000+.
Robinhood almost certainly did this to save Citadel’s ass, who had a ton of short exposure to GME and others. As we know, when Robinhood shut down the momentum they made enemies out of millions of Redditors, particularly on Wallstreetbets.
What follows is an honest look at what actually transpired in $HOOD’s first week of trading, how it happened, who won, and who lost.
- @JimEngland
Payment for order flow…so what. So what?
-Jim Cramer the morning of $HOOD’s IPO
H O O D W I N K E D.
It feels like a lifetime ago that retail rejoiced as Robinhood shit the bed on their IPO day. The jubilant celebration of Robinhood gushing bear blood in the streets was enough for retail to think we’d finally won our unending battle to gamble irresponsibly, and without prejudice.
Then, this happened:
This right here seems totally rational, reasonable, and normal, right? I mean, what stock doesn’t absolutely rocket after debuting in a fireball of disaster during a laughingstock of an IPO day? Right guys?
We all know what happened: First it took a big ol’ dump, then $HOOD soared to astronomical prices, rocketing to a 100% increase in the stock’s value over a two day period. It’s the anatomy of how it happened, however, that should concern all YEETers, retailers, and anybody who believes in a fair and just market.
It doesn’t take skepticism to realize there was treachery afoot, but instead a glance at the progression of headlines that accompanied Robinhood’s fall, rise, then fall again. When the $HOOD IPO happened and things didn’t go as planned, Robinhood seemed poetically fucked—especially in the eyes of relieved retail traders who’d been on the wrong end of the trading halts. Then somehow, over the course of a weekend, Robinhood headlines went from this:
And this:
To this:
And this:
Maybe before this would all be bought without question; before the GME run, before our financial independence was ripped away by Robinhood halting meme trading, before congress literally had to hold hearings and enact laws to stop hedge fund and market maker manipulation. Well, no longer...
I haven’t been on Wallstreetbets in a while, and I’m guessing you probably haven’t either. Why? Since the second ape run in the spring, bots and paid shills have been slowly, insidiously, and successfully infiltrating our community. Our once virgin territory of YOLOs and FOMOs—our speculative casino—has had its integrity eroded. Not by the hard-working mods, or my good friends who spend hours writing meticulous DD on how we can next lose our money, but instead by the “invisible hand which guides the market”.
Wallstreetbets is implicated by media as the reason for the $HOOD surge in endless headlines, such as the ones above. But there is one common, consistent, and telling nuance in the language that the articles use—likely for legal reasons—when speculating on what’s actually causing the pump. See if you can spot the consistency:
Social Media sentiment tracking is a tool used excellently by YEET contributor @mkt_sentiment, and it allows you to track and dissect ticker mentions. What you should notice in the above examples—and any other article you find—is that they never say what the context is of this robust Robinhood discussion on Reddit; they’re silent on whether the $HOOD chatter they cite from the subs is actually positive or negative in nature. These media outlets simply say that $HOOD is...“mentioned”. Why? Our friend @mkt_sentiment shows us with this sentiment snapshot of $HOOD:
The percentage in the sentiment columns (far right) represents the positive or negative $HOOD mentions, above or below a neutral baseline of 50/50. So, on the IPO day for example, $HOOD mentions were only 1.8% positive. Anything under a few percent represents a neutral sentiment. Let’s look comparatively at the sentiment for AMD and TSLA from that period :
Market Sentiment explained to me that positive sentiment for memes is normally between 15% and 30%. Why, then, is $HOOD so comparatively low, even though as Cramer said above, ‘This is Reddit’?
Because it’s not. $HOOD mentions on social media and Reddit aren’t actually positive, using the above statistics. Financial media outlets are pumping a narrative about $HOOD mentions on WSB rocketing the stock, without even realizing (or caring) that most real mentions of $HOOD began neutral to negative according to sentiment tracking.
Anecdotally, here’s what I see when I search “HOOD” on WSB; a flood of DD negatively mentioning Robinhood with hundreds and thousands of upvotes. The few DDs and gain porn posts that do pump HOOD? Try zero upvotes for the most part, written by accounts no more than six months old, by users with post and comment Karma in the single digits (for the Reddit uninitiated, this typically means that they are fake accounts).
Random articles and fake DD weren’t the only tools trying to trick you into believing $HOOD was the official meme of Redditors (an insinuation that we’ve shown is demonstrably false). Jim Cramer used his sizable Twitter audience to pump this false narrative:
Then he gets more explicit:
Then he still keeps it cringe while driving the false point home once more:
All these false news and media narratives had one chilling effect; to actually induce retail FOMO into $HOOD. As the media narrative picked up over the weekend, you can see positive sentiment spiking with it. While still low, the upward ticks in sentiment would be strangely out of place for a stock this hated that dumped this hard on its IPO. Using their fake headlines, bots, and shills, “they” managed to poison the well.
Then? Then they set the snare for their dump, coinciding with the first day options trading, in a way YEET researcher @suaracula explains:
A key element here was the introduction of $HOOD of options. They (MMs & hedgies) could afford to drive the price up the day before options went live, because they’d make even more money back by selling puts to retail and/or buying calls to scalp. The retail sentiment was clear; we were buying poots because we wanted to “short” it, and that’s the sole mechanism we knew to achieve this. So, to fuck retail, they drove the price up to make our poots worthless, shaking us out before we could profit from the inevitable dump.
At this point the media has been manipulated, Reddit forums have been falsely fed positive news and sentiment to induce FOMO, and $HOOD stock is through the roof. Now with the introduction of options trading, “they” can profit enormously off this completely manufactured retail frenzy. All the qualifications for an optimal pump have now been met. So, then, what happens next? You already know my friend:
They pulled a Farva from Super Troopers: “I got you good, fucker!”. It was the dump of all dumps, an earth-shattering drop just when retailers had stuffed their bags full of calls. What makes this dump so insidious, so unbelievable, and so textbook? That they didn’t even try to hide that it benefited insiders while screwing retail! $HOOD surged for false and manipulated reasons, insiders profited, they dumped their shares, and they dared you to say a fucking word about it.
You know who had a word to say bout it? Our good friend Jim Cramer....who warned us all the night before the dump to take profits. After-hours, of course, when you couldn’t do a damn thing about the dump that came the next morning pre-market. This, A DAY after he was tweeting that “Robinhood would crush the shorts”. Here he is on August 3rd, gloating about “pushing”—yes, he fucking said “pushing”—$HOOD.
Then here is, one night later, the evening before the pre-market dump, telling investors it was time to bail.
Cramer is an investing icon first, and a backroom buddy second. This was one of the few situations where he could win on both fronts. Logic and chronology dictate that he clearly knew the insider dump was coming, and at that point switched his stance publicly, allowing him to win on the stock movement prediction while also doing it at a time that didn’t hurt his back-room buddies. How else do you explain one man switching his stance so quickly, so completely...and with SUCH perfect timing? This 🐍 changed his stance in the retail no-mans land, between after-hours and pre-market, when your calls become worthless while your hands are tied.
It’s over now and the Endgame has arrived. The hedgies have won, the MMs have won, the media has won, and Robinhood has won. Who has lost? Retail as we hold the bags from a meme run—of a stock that wasn’t actually a meme—that never even stood a chance.
And there you have it, folks, a pump and dump recipe that has been proven beyond a doubt. $HOOD got us good:
Promotion by media of a Citadel-protected stock that would be hated when released to the public.
The false attribution of the stock’s sudden success to Wallstreetbets, even when there is undeniable proof that Reddit is not responsible.
Poisoning WSB with FOMO by planting bots and shills in comment threads and DD, and having said media and shills create a false dichotomy between current meme stocks.
Insiders can now dump their shares, becoming (even more) rich while retail gets left holding the bag during the hedgie revenge Pump & Dump of a lifetime.
This should aggravate you, piss you off, and incite you to do something about it. Let @robinhood know this article exists. Let @jimcramer know this article exists. Let @vladtenev know this article exists. Retweet this YEET. Tag them. Tag a friend. And let them know we know we were #HOODWINKED.