On March 31, 2023, Citadel Advisors LLC produced an information brochure that contains some interesting information.

Oddly, it wasn’t until around October 2023 when this document was discovered and posted on reddit. This post goes through the document at some length.

There are a bunch of different interesting things that are found in the information brochure.

For example, under the section titled Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss - General Risks:

Short Positions

A short sale of an investment instrument entails the risk of an unlimited risk of loss as there is no limit on how much the market price of that investment instrument may increase before the short position is closed. As a result, short sales can result in significant losses to a Fund.

…purchasing investment instruments to close out a short position in such investment instruments can itself cause the price of the investment instrument to rise further, increasing losses.

Risks of short selling are increased by actions aimed at creating “short squeezes” (e.g., increasing the price of specific securities for which there are known or perceived substantial short positions across the market, resulting in short sellers closing out their short positions in such securities at the demand of lenders or to curb further potential losses, which, in turn, further increases the price of the specific securities). Hedge funds that trade securities that are considered “meme stocks” may be particularly prone to short squeezes related to such stocks.

Citadel basically confirms things that GME investors have been speculating about for a while. I assume that the purpose of Citadel producing this brochure is for legal liability reasons.

When they say it, it’s just good business. But when GME investors talk about it, we’re called all kinds of derogatory words that insinuate we lack intelligence and knowledge and that we’re delusional.

The writing is on the wall.