The stock market has always attracted bold players—hedge funds, retail investors, and institutions—willing to take massive risks. But some bets go beyond simple investment strategies. These controversial moves stir public debate, shake up companies, move entire sectors, and sometimes even provoke political responses.
Below are some of the most controversial stock market bets in recent history, especially in the last two years. These cases not only reflect high-stakes gambling on stocks but also reveal deeper problems in the market, from regulatory loopholes to manipulative tactics.
1. GameStop and the Meme Stock Short Squeeze
In early 2021, retail investors on Reddit’s WallStreetBets forum united to target hedge funds that shorted GameStop, AMC, and other stocks. Their coordinated buying triggered a short squeeze that pushed GameStop’s stock price from under $20 to nearly $500.
In May 2024, Roaring Kitty (Keith Gill), a key figure in the first GameStop rally, returned online. His comeback reignited the frenzy, driving GameStop’s stock back above $48 from less than $14. GameStop’s leadership quickly issued more shares and raised nearly $900 million.
Why it caused controversy:
Retail investors flipped the script on Wall Street. Hedge funds like Melvin Capital suffered huge losses. The episode revealed flaws in short-selling practices and exposed the fragile balance between retail trading and institutional control. It also forced platforms like Robinhood to restrict trading, triggering Congressional hearings.
2. Citadel’s Short Bet Against GSK
In early 2025, hedge fund giant Citadel, led by Ken Griffin, shorted pharmaceutical company GSK. The short position totaled around £305 million, representing 0.51% of GSK’s stock. This move came just after GSK announced a £2 billion buyback and projected growth in its vaccine and drug sales.
Citadel didn’t trust the company’s long-term pipeline. It believed GSK’s HIV treatment patents were nearing expiration and viewed its future product launches as weak.
Why people debated it:
Shorting a blue-chip pharmaceutical company seemed aggressive, especially when that company was investing in its own future. Critics questioned the ethics of targeting a health-sector giant during a sensitive time for global healthcare innovation.
3. Elliott Management’s Bet Against Antofagasta
Elliott Management, a hedge fund known for aggressive investing, built a £79 million short position against copper mining company Antofagasta. It did so while holding long positions in other mining stocks. Industry insiders speculated that Elliott used the short as a hedge.
Why it stirred concern:
Copper plays a vital role in clean energy and global infrastructure. Betting against a leading copper supplier raised eyebrows, especially as Elliott has used short positions in the past to pressure companies into restructuring.
4. Leveraged ETFs and the “Squid-Game” Effect
Leveraged exchange-traded funds (ETFs) aim to double or triple the daily returns of major indexes or individual stocks. In 2024, traders poured $40 billion into these risky tools, driven by excitement around stocks like Nvidia and Tesla.
However, when markets dipped in early 2025, those same ETFs crashed hard. Traders who didn’t understand how leverage worked lost millions overnight. Direxion and other fund providers saw extreme volatility in their products.
Why experts raised alarms:
Leveraged ETFs suit only short-term strategies. Retail traders treated them like long-term investments, not realizing the dangers. The market saw major swings that some analysts blamed on the overuse of these tools.
5. Zero-Day Options Take Over Wall Street
In May 2025, options that expired the same day—called zero-day-to-expiry (0DTE) options—made up more than 60% of all S&P 500 options volume. Traders loved these products because they allowed fast bets on intraday price moves. But data showed most retail investors lost money on them.
These options favored professionals, like market makers and hedge funds, who sold them and collected premiums. Meanwhile, retail traders lost out due to poor timing and high fees.
Why regulators grew worried:
Many compared 0DTE options to gambling. They increased volatility and created instability around market close. Critics asked regulators to limit these trades or enforce better risk warnings.
6. SharpLink Gaming’s Crypto Surprise
In June 2025, SharpLink Gaming, a small-cap stock, saw its share price explode over 1,000% in just a few days. The company had announced plans to shift its treasury into Ethereum, which drew attention from notorious former pharma executive Martin Shkreli.
Shkreli claimed a potential short squeeze might occur due to SharpLink’s low share float. His comments, combined with online chatter, caused a massive price jump.
Why it drew skepticism:
Analysts argued the company’s Ethereum pivot felt like a publicity stunt. The hype around Shkreli only amplified concerns. Traders questioned whether the rally had anything to do with the company’s actual performance or just internet excitement.
7. Hedge Funds Dump Energy Stocks Fast
In June 2025, hedge funds started selling energy stocks at record speed. This happened as peace talks in the Middle East eased fears of supply disruptions, and oil prices fell sharply. Funds took quick short positions in companies across Europe and the U.S.
Though they stayed net-long on oil overall, the rapid selling triggered sharp market drops and caught retail investors off-guard.
Why it mattered:
Energy stocks reflect broader economic health. Such large, coordinated sell-offs from hedge funds signaled uncertainty about global growth. It also showed how quickly institutional money can move and shake up sectors.
8. Retail Traders Battle Institutions Over Risky Bets
Retail investors keep pouring money into risky areas like leveraged ETFs and 0DTE options. Meanwhile, institutional players often profit by selling these instruments.
The ongoing struggle between retail and professional traders has created strange trading patterns, often with huge swings and flash rallies.
Why this dynamic gets attention:
Retail traders often don’t understand the complexity or risk behind the tools they use. Professionals exploit that lack of knowledge. Critics argue platforms and regulators need to do more to protect retail investors.
9. Hedge Fund Leverage in IPO Bets (Bumble Case)
When Bumble went public, hedge funds used borrowed money to buy shares. As the company’s value dropped and layoffs increased, funds exited to reduce risk. These moves caused sharp price declines.
The situation raised questions about how much leverage hedge funds use when buying into newly listed companies.
Why it raised concern:
Investors saw how fragile IPO valuations could become when hedge funds pull out quickly. It revealed the dangers of relying on borrowed money to support stock prices.
10. Tariff Speculation and U.S. Industrial Stocks
In early 2025, some hedge funds started shorting U.S. industrial and manufacturing companies. They believed rising global tariffs would hurt business.
At the same time, retail investors bought billions of dollars in those same stocks, thinking tariffs wouldn’t happen or would have limited impact.
Why it became a flashpoint:
This disagreement between hedge funds and the public showed how political events could split investor opinion. It also highlighted the risks of betting heavily on economic predictions that can flip overnight.
Final Thoughts: The Thin Line Between Strategy and Speculation
The most controversial stock market bets show us how unpredictable and emotional markets can become. Whether it’s meme-stock mania or high-leverage hedge fund plays, these trades blur the line between strategy and speculation.
Investors must stay aware of market forces, understand the tools they use, and question the motivations behind sudden market moves. Controversy may always live on Wall Street—but informed decisions can help navigate through the noise.
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