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U.S. stocks retail investors agreed to "report the group" together, and the bloody battle to the end has just taken place!
That night, Tesla CEO Musk tweeted that he would leave Twitter for a period of time.Previously, his tweets sparked a frenzy in the stock market, causing the stock prices of several companies to soar.Last week, he also supported retail investors on Twitter, adding fire to the soaring share price of Game Station.
"Retail holding group stocks" fell collectively
On the news, the US House of Representatives Financial Services Committee announced that it will hold an online hearing on Game Station and other stocks on February 2, investigating the relationship between Robinhood and related hedge funds, and investigating Robinhood’s restrictions on customer trading in Game Station and other stocks last week Decision-making.
Musk announced that he is temporarily leaving Twitter
On February 2, Tesla CEO Musk tweeted that he would leave Twitter for a period of time.As for the reason, he did not specify.
Musk has nearly 4500 million followers on Twitter.Previously, his tweets sparked a frenzy in the stock market, causing the stock prices of several companies to soar.Last week, Musk supported retail investors on the Reddit website on Twitter, adding fire to the soaring share price of Game Station.A few hours later, he tweeted again to express his love for the retail website Etsy, pushing the company's stock price up 8%.
A few days ago, Musk modified Twitter's profile, leaving only the word "Bitcoin", causing the price of Bitcoin to soar by about 20%.This is not the first time Musk has declared that he is leaving Twitter. In October 2019, Musk announced that he would no longer use Twitter, but it only lasted a few days.Earlier time-in June last year, Musk also announced that he would temporarily leave Twitter.
Is it just a fantasy for retail investors to contend against Wall Street?
The retail power suddenly caused a big storm in the U.S. stock market, which is rare in the modern history of the U.S. stock market.
Regarding the issue of US retail investors holding groups, the brokerage China reporter interviewed Hong Hao, the managing director and head of research department of Bank of Communications International.Hong Hao said that it is only an illusion that American retail investors can contend with Wall Street institutions. The institution suffered a major defeat at the game station, mainly due to excessive short positions. This is just a case and does not represent the gradual progress of the entire US stock market. Retail.
Hong Hao further pointed out that it will be difficult for the US market to become more retail investors in the future, and mainstream index funds will not change because of retail investors.
In addition, the Tiger Securities investment research team also told a brokerage China reporter that the retail group is a counterattack against GME's short-sellers. It is only a phenomenon-level incident, which is related to the epidemic, the attributes of retail investors, and liquidity overflow.In the long run, retail group holdings will not become a trend. When the tide recedes, US stocks are still a highly institutionalized market.
Yinglu Securities chief analyst Le Shunning said that despite the terrible failure of Wall Street institutions, the strength of US stocks retail investors and institutions is still not comparable, and institutions have greater capital advantages.In the future US stock market, retail group investment may still exist, but there is a high probability that it will not become a trend.
Goldman Sachs warns: If the short-squeeze continues, US financial markets will collapse
The unprecedented short-squeeze action of US retail investors has affected the sentiment of the US stock market.Last Wednesday, the three major U.S. stock indexes fell 2%; on Friday, the three major U.S. stock indexes fell another 2%.
Goldman Sachs, a well-known investment bank, said that if retail investors continue to short-sell, it may trigger a market crash and may lead to the next financial crisis.
Goldman Sachs believes that the current solidarity actions of retail investors will continue. Compared with the US stock market peak in 2000, the current US household savings scale is at a high level, and there will be more than $1 trillion in additional financial support, which means retail investors’ "Ammunition" is sufficient, but once again reminded that if the short position continues, US stocks will face risks.
A small number of unsustainable excesses may cause a domino effect and cause wider fluctuations.In recent years, the low trading volume and high concentration of US stocks have made the liquidation of funds like a snowball, increasing the risk of affecting the entire market.In order to cover short positions, or to make margin calls, hedge funds have to reduce their long positions.This caused Goldman Sachs's basket of stocks most favored by hedge fund bulls to drop 4% last week.
The White House will review "Game Station" stock trading
The incident of US retail investors holding groups to short hedge funds has also aroused the attention of US regulators.
On January 1, local time, the U.S. Securities and Exchange Commission (SEC) stated that it will review the recent trading fluctuations that have caused the share prices of companies such as game station and theater chain AMC to soar.
The SEC stated that "we will be committed to protecting investors to maintain fairness in the market."
The SEC promised to carefully study actions taken by brokerages that may “unfavorable investors or otherwise improperly inhibit their ability to trade certain securities”. "When it turns out that there is abuse or manipulation of trading activities prohibited by the Federal Securities Law, we will take action to protect retail investors,"
On January 1, US President Biden’s senior economic adviser said in an interview with the media that the Biden administration will investigate the legal issues of the "game station" roller coaster stock transaction last week.
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