Can large hedge funds manipulate stocks?
Sources:
Large hedge funds do have the potential to manipulate stocks, as discussed by various experts.
For instance, highlights that manipulation isn't new and often involves significant players using influence under assumed names in forums to steer stock prices 1. The practice dates back to the early 20th century but remains prevalent, especially in environments where large amounts of capital can influence stock movements, as seen in events like the AMC stock surge 1.
Similarly, discusses the risk posed by illiquid financial instruments like the VIX, facilitated by a few powerful entities, leading to broad market impacts. He stresses the need for stricter regulation to prevent such manipulation, although he acknowledges the difficulty in enacting effective measures 2.
In another example, alludes to broader conspiracies where financial systems tend to favor established wealthy groups over younger investors, but debunks the idea of direct conspiracies involving hedge funds against retail traders during events like the GameStop surge 3.
These insights suggest that large hedge funds indeed have the means to influence markets, a capability that necessitates vigilant regulation and investor awareness.
RELATED QUESTIONS
