Diving…
The story of U.S. retail investors bloodbath on Wall Street continues tonight, but what a surprise! Wall Street unplugged the net and wiped out the ticker symbols!
AMC and GME stocks are now untradable at Robinhood
US online brokerage Robinhood has reportedly shut down trading in shares of GameStop (GME), AMC Theatres (AMC) and Nokia (NOK).
According to some users of Reddit forums and Twitter, AMC, GME and Nokia stocks cannot be found on Robinhood at the moment, i.e. they are no longer tradable.
Recently, stocks that were previously heavily shorted, such as GME, AMC and Nokia, have seen their share prices soar. Among them, AMC rose more than 300% at one point on Wednesday, and GME also jumped 130%.
Analysts say this may be because retail traders are trying to create a short squeeze in these stocks. These stocks have high short-side positions, so rolling short or forcing shorts to cover their positions quickly pushes the stock prices higher.
Driven by the frenzy of retail traders, several online trading platforms went down and Robinhood became the #1 financial App on the iPhone. Currently, Robinhood is the most popular stock speculation platform for retail investors in the United States.
A-share netizens are stunned!
In addition, Futu Holdings said that GME and AMC stocks have been banned from opening positions (closing positions are not affected) due to upstream restrictions, and a number of U.S. domestic brokerages have also banned open trades in some of these stocks. Due to the impact of such stocks, the upstream trading channel is congested and some orders are stuck, so it is recommended to participate with caution.
Intrust Securities said it liquidated options trading in AMC, BB, EXPR, GME and KOSS due to unusual market volatility. In addition, 100% margin is required for long equity positions and 300% margin is required for short equity positions until further notice. Intrust Securities is one of the largest online brokerages in the world and its policy is indicative.
GameStop stock price fluctuates violently
Multiple meltdowns triggered
On the evening of the 28th, after the opening of the U.S. stock market, the share price of GameStop plunged 24%, then pulled up rapidly, triggering the meltdown several times during which it rose as high as $482.85 per share, an increase of nearly 40%, followed by a rapid dive, and the long and short games were quite violent. Market news said that the game station once became the first component of the Russell 2000 index (market value).
As of press Time, GameStop was halted for the eighth time during the day, expanding its decline to 31%, after once surging over 35%.
The same trend also happened to AMC Cinemas. As of press time, AMC plunged nearly 60%.
After surging over 300% in the previous trading day, it is understood that AMC Cinemas is a movie projection company owned by Wanda Group and the largest theater chain in the United States. Previously, various negative news in the context of the new crown Epidemic has hit AMC Cinemas’ stock price. This week AMC Theatres’ bankruptcy alert was lifted and the company’s shares have surged for three consecutive days, driven by retail investors’ enthusiasm.
Citi analysts warned investors that some ETFs are facing distortions due to GameStop’s recent surge, as the company’s greater influence has changed the composition of the ETF and could force the latter to make “temporary rebalancing and strategic adjustments. GameStop’s sharp volatility over the past month “has increased its visibility among various ETFs. Whether trading long term or hedging, it highlights that users of these ETFs should be aware of the tremendous influence that GameStop’s price action can have on their positions.” Citi also warns to “pay particular attention to ETFs that are consolidated and leveraged.”
Retailers’ Base Camp Ended: Discord Platform Decides to Remove Wallstreetbets Server
28 p.m. – Discord reportedly announced on Wednesday that they have blocked the servers of r/WallStreetBets because it had repeatedly violated the platform’s anti-hate speech policy.
A Discord spokesperson told the press, “The WallStreetBets server has been under the watchful eye of our security team for some time due to repeated content that violates community guidelines, including hate speech, glorification of violence and the spread of misinformation. Over the past few months, we have issued multiple warnings to the service’s administrators. Today, we have decided to remove the server and its owner from Discord for continuing to allow hateful and discriminatory content after receiving multiple warnings.”
This comes after the r/WallStreetBets community on Reddit exacerbated the huge swings in the stock market over the past few days by driving up the share prices of GameStop, AMC Theaters and Nokia.
While the r/WallStreetBets community was born on Reddit, its members have set up a “server” on the group chat platform Discord where they can discuss stock trading plans.
Administrators of the Reddit community have criticized Discord’s move. On Wednesday, they posted on Reddit: “Success has also brought us torture, and our Discord server was the first casualty. It’s clear to everyone that if 250,000 people are gathered in one place, then someone is bound to say something nasty here. But the room itself is good, and the people who run it are wonderful people. discord has thrown dirty water on us. It’s very unethical.”
But Discord said their decision to remove the server had nothing to do with the trading activity discussed by the group. a Discord spokesperson said, “To be clear, we are not blocking this server for financial fraud related to GameStop or other stocks. discord welcomes all kinds of personal finance discussions, from investment clubs and day traders, to college students and professional financial advisors. We are monitoring the situation and will work with authorities on a case-by-case basis if there are allegations of illegal activity.”
The trading activity conducted by the WallStreetBets community has, in large part, wreaked havoc on traditional Wall Street institutions, with GameStop shorts alone suffering losses of more than $5 billion in positions.
The volatility of the stock market also had the White House saying on Wednesday that it was “monitoring the situation.
Our team, the economic team, including Treasury Secretary Janet Yellen and others, are monitoring the situation,” White House press secretary Jen Psaki said at a news conference. It’s a good reminder, but the stock market is not the only measure of the health of the economy. It doesn’t reflect the condition of middle- and working-class families.”
U.S. retail investors represent perfect rage against Wall Street
On the morning of the 28th, Hong Hao, Managing Director and Head of Research at CBI, issued a Weibo repost about Chamath Palihapitiya, a representative of U.S. retail investors and CEO of Social Capital, who tongue-tied the CNBC host and responded brilliantly to his lead in leading U.S. retail investors to buy GameStop (code GME), the following is the full text of the Weibo repost.
The highlight of the day came when CNBC invited Chamath on TV to start a discussion (those who don’t know Chamath must wiki it, this era is definitely no longer Warren Buffett’s era, but belongs to people like Musk and Chamath. (Whether you agree or not, that’s what the new generation of young people think). CNBC wants to morally grill Chamath and take the heat off the rebellious group.
I don’t think the best words can describe the brilliance of Chamath’s mouth-blading CNBC host on TV. I hope readers who have the means to do so will watch the interview, which is about 20 minutes long. I’ll summarize a little, but, my summary is far from being able to restore the excitement of what happened.
1, GME stock price soared because this stock was shorted by institutions 140%, what makes it possible to 40% more? If it weren’t for Wall Street institutions using tools that retail investors can’t use every day, how could it be 40% more while being caught short by retail investors? Perfect.
2, the level of research on the forum, many of them are comparable to the level of hedge fund research (which I also recognize), why can not the retail investors to buy and sell based on these studies?
3, the quantitative funds on Wall Street (specify Renaissance), simply do not look at the fundamentals to buy and sell, why they do not look at the fundamentals can not be blamed, while the retail investors do not look at the fundamentals to be blamed? Perfect.
4, from the history of tesla stock price, all hedge funds are wrong, all retail investors are right, why hedge funds must be right than retail investors? Perfect.
5, hedge funds are only open to large investors and not open to retail investors, and now the retail investors are making money and are dissatisfied to restrict retail investors, why? Still perfect.
I thought it was a moral question for retail investors, but it ended up being a question for the soul of the establishment! Brilliant.
Chamath also made it very clear that the market neutral principle (market neutral) funds rely on $1 billion of principal, you can get the brokerage $ 10 billion of leverage, these are the advantages of retail investors do not have. Wall Street relies on secrecy, on good dinners, on hooking up with each other to monopolize the investment market. And the forum discussions are transparent, and these are the things Wall Street should learn.
Reviewing the epic retailer vs. Wall Street
It all started with Gamestop, the gaming retailer, Gamestop (GameStop), or GME for short.
Many people in the United States grew up going to Gamestop to buy game trays. Parents lined up before Christmas, carrying games Home, very memories and atmosphere. But with technology now advanced and everyone connected to the internet, fewer and fewer people will go to physical stores to buy physical games, and most people have not been positive about GameStop since the past few years. The stock price fell from 28 all the way in 2016 to more than 3 yuan at the end of 19. Last year, GameStop became the most shorted stock in the U.S. According to FactSet, GameStop GameStop’s net short interest was 138% of the stock’s outstanding volume.
And just as GameStage was driven to the brink of bankruptcy and facing delisting, U.S. forum reddit netizens saw these vigorous positions in short institutions, and some began encouraging people to buy GameStage shares and options.
WallStreetBets, a reddit subdivision similar to a Chinese stock bar, is also known as the “WSB concept” for the aforementioned recently surging stocks that have been heavily shorted.
On Tuesday, the company’s stock closed up 92.71% at $147.98. On Wednesday, the stock closed up 133.13% again, with the latest share price reaching $344.99. On Jan. 12, its closing price was just $19.95, up more than 16 times in just 10 trading days.
According to S3 Partners, GameStop had a short loss of more than $5 billion as of Tuesday, including losses of $917 million and $1.6 billion on Monday and Friday, respectively.
Gabe Plotkin, manager of the $10 billion U.S. hedge fund Melvin Capital, told CNBC on Wednesday that the firm had liquidated its short position in GameStop on Tuesday afternoon after a huge loss. The exact amount of Melvin Capital’s short position in GameStop is not yet known.
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