How an extremely disruptive social event facilitated my approach towards the financial sector
Ever heard of a short call, short position or short squeeze? If the answer is no, don’t panic, you are not the only one!
Few days prior to the start of my internship, the Gamestop case erupted. I still remember the first meeting with the organization’s managing partner who asked me “Have you heard of the mess that is happening in Wall Street?” Honestly, I had simply heard that something had happened but had no idea of the dynamics of the event. Guess what? The Gamestop case from a mere social event that interested Wall Street-savvy people became the starting point of my internship and the vehicle through which I got to understand the field in which my organization operated.
By gathering information about the event, I gradually got acquainted with all the financial jargon. It took me one week to understand the difference between short and long positions. But, once realized, I had the proper foundation for understanding the core activities of the hedge fund I was interning for.
The hedge fund (Quintessential Capital Management – QCM) is a New York-based organization that mainly deals with short selling but that engages in long positions from time to time. What does this mean? Put very simply: after having performed financial analysis on the values of listed companies, a hedge fund can either bet against the target company (assuming/hoping that its value will decrease) or instead can bet that its value will increase and, thus, hope in the positive financial performance of the target company. The former case is translated into “taking a short position”, the latter in “taking a long position”.
My first thought was: “Well, that’s not such an honorable activity to perform” but my opinion drastically changed when I started reading reports the company had released and news articles in which QCM had been mentioned. This is because I realized that the type of short selling performed by QCM was an extremely ethical one. Indeed, the hedge fund takes short positions only of those companies whose values in the Market appear to be unrealistic and inflated. This is because these companies engage in unethical and fraudulent behaviours and, thus, perform fictitious transactions. One campaign specifically captured my attention: the one QCM initiated against Penumbra, a global healthcare company that continued selling a killing catheter even if reports confirmed the causal relationship between catheter adoption and patients’ death. How did it end? The company was obliged to withdraw the medical device from the market…and the price was very high!
Interested in performing combining communication activities in the financial field? Then this is the right internship for you!