Skip to content
Subscriber Only

Reddit Traders Are Upending the World of Credit Investing, Too

  • Distressed funds need predictable equity markets to hedge bets
  • Risk of getting caught in meme-stock run up keeps firms at bay
Reddit CEO Says WallStreetBets 'Well In Bounds' Of Its Policy
Photographer: Tiffany Hagler-Geard/Bloomberg

It was the type of master stroke that could make a Wall Street career. Jason Mudrick’s financing of AMC Entertainment Holdings Inc. at the height of the pandemic netted his hedge fund hundreds of millions of dollars in just a few months.

Then, in the blink of an eye, it was gone. Options contracts meant to hedge the bullish wager went haywire as retail traders flocked to AMC’s stock, pushing shares to once unimaginable heights and costing Mudrick Capital Management all of its gains -- and more.