Unprecedented, retail investors launched an Internet "financial uprising" to Wall Street https://t.co/GZwo4fYqzs pic.twitter.com/2XXWuzVese
— RFI Chinese-Radio France International (@RFI_Cn)
January 30, 2021
At the beginning of the new year, there are many major topics that have attracted global attention, but these events have not been able to overshadow a revolution that is happening on Wall Street in recent days.If four years ago, under the banner of populism and economic nationalism, Trump and his supporters began a historic impact on the traditional political establishment in the United States. Many observers believe that what is currently happening on the US stock market Retail investors Baotuan's crusade against big investors and hedge funds may have a historical position no less than that of the revolution four years ago.
If you are the Hollywood superstar Christian Bell (Christian Bell) who played the movie "Batman."
Bale fans, you must have seen the movie "Big Short" released in 2015 about how Wall Street investors were driven by interest and greed to cause the 2008 global economic crisis.This film uses real-life adaptations to introduce the story of keen investors who discovered problems before the burst of the giant real estate bubble in the United States, and how to make a lot of money from Wall Street banks in the crisis by shorting real estate financial products .Who would have thought that nearly 13 years after the global financial crisis, thousands of retail investors also began a historic crusade against Wall Street investors and large hedge funds.
This is how the story happened. GameStop is an American electronic game chain physical retailer.If you live in the United States, you can generally see this shop selling games and surrounding areas to customers in shopping malls.However, with the rapid development of online game download platforms and online ordering platforms such as Amazon, Game Post, a company that relied on the economic model of the last century for profit, has also been increasingly affected by the development of the Internet in recent years.The stock price of this arguably "old antique" company has also been showing a downward trend.Coupled with the outbreak of the new crown epidemic in 2020, the company is even worse, and has to permanently close nearly 500 stores.
The dim performance of the game station in reality has also attracted the attention of many Wall Street hedge funds.There are rumors that many hedge funds are already shorting the share price of Game Station.Short-selling is a common operation method in the stock futures market. The operation is to anticipate that the stock futures market will have a downward trend. The operator sells the chips in his hand at the market price and waits for the stock futures to fall before buying to earn the intermediate price.But what happened recently that the elite investors who have been on Wall Street for decades never expected that this time the financial tycoons and their hedge funds not only failed, they also overturned.
Recently, the share price of Game Station did not keep falling as short-sellers had hoped. It suddenly became the most popular investment target in the United States. The stock price went from $1 on January 12 to $19 on the 29th. Its stock price has been in the past. It once soared by 309% in two weeks.As for what happened, the simplest explanation is that the "Daze Township" of the "leeks" uprising started in the "Wall Street Bets" (r/WallStreetBets) section of the famous Internet Post Bar Reddit.According to related reports, there have been news that many large hedge funds are shorting the game station in the sector recently. Those who have good news on the forum called on netizens to concentrate their funds to raise the game station’s stock price and bet against these Wall Street giants.
According to related reports, before the stock price surge, many institutions shorted Game Station. According to data from FactSet, the net short position of Game Station once reached 138% of the stock circulation, and once became the listed company with the most short-selling in the US stock market. .After the market on January 1th, US time, Musk, the richest man in the world, posted a tweet chanting "Gamestonk!" with a link to the "Wall Street Betting" section.Musk’s tweets added fire to the original crazy market. On the 26th, the stock price of the pre-market game station soared to 27%, and the stock price once rose to 143 US dollars per share. During the trading hours of the US stock market on the 360th, the share price of Game Station once rose to a record high of $28, then experienced 483 circuit breakers, and finally closed down more than 17%.Earlier, Citron, a well-known Wall Street bearer, had issued a bearish report on Game Station, believing that its reasonable stock price was only $40.
The call for investing in game station stocks has received a large-scale response. In a collective and large-scale way, retail investors designated to raise the game station’s stock price to "squeeze", that is, quickly raise the stock price, so that short speculators have to Buy at a high price to get huge profits.After these retail investors formed a group through the Internet, they lured the large hedge funds that placed bets into a trap. The latter's attempt to short the share price of Game Post did not succeed, and also encountered an unprecedented "financial uprising" and The huge losses caused by the class struggle without gunpowder.The long-term control of the capital market by Wall Street elites has also made these retail investors cry out in this revolution, "The princes will have a kind of peace."
But why netizens can jump over the traditional investment threshold to invest directly in stocks, and even affect the stock market, is inseparable from their skillful use of new software such as "zero commission" online brokerage firm Robinhood.In the old days, this so-called "showdown" situation was often considered impossible.Because the capital strength of the two parties is too far apart.However, the epidemic has accelerated the highly networked personal life.Retail investors are also highly networked in their personal investment aspects such as listening to investment advice and making buying and selling actions on the forum.In the past year, newly created online retail securities applications such as Robin-Hawk have rapidly become popular, and online forums have catalyzed discussions, making it possible for previously unimaginable retail coordination methods.
The group attack by retail investors caused at least two Wall Street hedge funds that shorted game stations to "surrender".With the concentrated media reports, the major brokerage trading platforms represented by Robin Man have suspended the trading of skyrocketing stocks. Except for the game station, other companies that have been named for concentrated investment in the "Wall Street betting" section such as AMC, Soaring stocks such as Blackberry are also restricted from trading, and investors can only sell existing positions and cannot buy them. The server of the “Wall Street Betting” section was once blocked on the grounds that it violated the anti-hate speech policy, not trading behavior.
At the same time, pro-Wall Street media such as the US Consumer News and Business Channel (CNBC) have also begun to question whether the practice of retail investors holding groups to drive up stock prices is reasonable and legal, and alleged that they are suspected of market manipulation.A user in the “Wall Street Betting” section that participated in the “financial uprising” issued an open letter to the hedge fund Melvin, who was forced to close its short position in Game Post
Capital, CNBC and all users of this forum.In the letter, the retail investor accused Melvin
Wall Street institutions represented by Capital said that they caused great suffering to millions of ordinary people in the 2008 financial crisis, but they were not punished, but were rescued. Now they have openly and illegally shorted stocks like Game Station. , Did not learn the slightest lesson from the crisis.
The retail investor also accused CNBC of being sponsored by large companies to speak out for them and "demonize" individual stocks such as retail hot game stations, saying that such media touted institutions are short-sighted profit-making behavior.Now, retail investors are seizing the once-in-a-lifetime opportunity to punish these institutions.Its supporters emphasized that Wall Street giants only allowed state officials to set fires and not the people to light the lights.They questioned Robin's and other online brokers and hedge funds collaborating.
Some people went to Wall Street to protest, and others filed a class-action lawsuit in the court, accusing Robin of “manipulating the market”.According to a report from the New York Post on the 29th, dozens of protesters gathered outside the New York Stock Exchange to protest Robin Man’s restrictions on trading. Some of them shouted "shameless" and "eat the rich."According to the report, these people held up the slogan "Tax on Wall Street Transactions" and yelled "I want my money, now" and "We want a free market."
In this regard, how can the bipartisan members of the U.S. Congress let this opportunity go unnoticed, such as the New York State House of Representatives, leftist radical AOC (Alexandria
Ocasio-Cortez) called on Congress to investigate the Robin Man app. AOC said in a tweet published on Thursday that Robin's decision to prevent retail investors from buying shares in companies such as Game Station and BlackBerry was unacceptable.In addition, she also said that if necessary, she will support the holding of hearings. AOC is a member of the House of Representatives Financial Services Committee, which has the power to conduct broader supervision of the stock market and securities and trading.
Radicals on the right, representing Texas Senator Cruz (Ted
Cruz) retweeted AOC's tweets and rarely stated that he completely agreed with her.Trump’s son, Donald Trump Jr.
Jr. also tweeted criticism, “In less than a day, big technology, big government, and corporate media began to take action and began to conspire to protect their hedge fund friends on Wall Street. This is what a rigged system looks like. Guys!" Robin Man CEO Vlad Teneff (Vlad
Tenev denied on the 28th that the brokerage was an "accomplice" to short hedge funds, and said that restrictions on the purchase of some stocks that have encountered concentrated speculative trading are "to protect the company and our customers."
Tenev told CNBC reporters, “We are facing the SEC’s net capital requirements and clearing house deposit requirements. We have to deposit this money in a number of different clearing houses. Some of these requirements change with market fluctuations. Under the current circumstances, These requirements have changed significantly because the stocks that go viral on social media are quite volatile and show many concentrated actions.” He also denied that his company had liquidity problems, saying that the company borrowed for precautions.Bloomberg News reported on the same day that Robin Man had borrowed at least hundreds of millions of dollars.According to reports, this loan amount is considerable for a company that was valued at approximately US$120 billion a few months ago.The lenders include JPMorgan Chase & Co. and Goldman Sachs Group.
It is worth mentioning that the prototype character of the aforementioned movie "Big Short" (Michael
Burry) in April last year, during the market crash caused by the new crown epidemic, boldly attacked and bought about 4 million U.S. dollars worth of game station stock.Scion Asset Management
Management）在当时披露，以每股2美元至4.2美元的价格收购了境况不佳的游戏驿站的5.3%股份（3400万股），总计花费约1500万美元。不过，监管文件显示，布里在游戏驿站股价真正开始爆发之前就开始出售他的股票了。截至去年9End of month，他已经出售了一半的持仓，还剩170万股，而且很有可能在进入年底前进一步减持了仓位。
Also on this topic, Jordan Belfort, the prototype character of the movie "The Wolf of Wall Street"
In an interview with CNN on the 28th, he said that he believes that entering the market now is very dangerous for some retail investors. "In fact, most people can make money from hot stocks, but they can easily lose all of them." He said, “This is indeed an improved scam to increase shipments, because it will definitely fall back in the final analysis. The game station does not trade at any reasonable basic value.”
Belfort warned, “Remember, whenever the market rises, the game station will rise, which will make the next rise more and more difficult, because the market value is unsustainable.” In this regard, he also described the end of the party. People are usually the biggest victims.He also thinks that the current law is difficult to prove
The "Wall Street betting" section is carrying out illegal activities. Although the so-called advocacy of solidarity can be regarded as illegal in theory, he still suspects that the US Securities and Exchange Commission (SEC) will try to file a lawsuit on this ground.
It is worth noting that the Texas Attorney General Paxton (Ken
Paxton announced on the 29th that it issued 13 civil investigation request (CID) letters to investigate and understand the prohibition of purchasing certain stocks, the requirement to provide higher margins for trading certain company stocks, and the suspension of online chat platform activities.He wrote on Twitter, "Today, I will investigate Robin, @discord, and hedge funds that manipulate our free market for the benefit of Wall Street elites." He said, "The U.S. economy should be transparent. , Public. This week’s oligarch’s coordinated corruption shows that it is not. I will help solve this problem."
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