Did the stock market bubble just pop?
Shares of highly shorted companies like Bed Bath & Beyond, National Beverage, and AMC Entertainment have surged alongside GameStop in recent trading.
Stocks sold off hard after the Federal Reserve monetary policy decision Wednesday, sending the Dow Jones Industrial Average down over 600 points.
The dynamic that has seemingly contributed to a short squeeze in the stock of videogame retailer GameStop Corp. also appears to be affecting shares in a host of other heavily shorted companies.
Shares of GameStop and AMC Entertainment Holdings more than doubled on Wednesday, forcing hedge funds to retreat with heavy losses and sparking calls for scrutiny of social media-driven stock market trading. Short-seller Citron, a target for some of the individual participants on Reddit's "WallStreetbets" thread who have helped drive gains for several niche stocks in the past week, said in a video post it had abandoned its bet on GameStop shares falling after the video game retailer's value soared almost tenfold in a fortnight. With commentators and lawyers calling for scrutiny of the moves, Nasdaq chief Adena Friedman said exchanges and regulators needed to pay attention to the potential for "pump and dump" schemes driven by chatter on social media.
Apple posted record Q1 earnings on the strength of iPhone sales.
Stocks dipped Wednesday as investors awaited another batch of corporate earnings results and the Federal Open Market Committee’s (FOMC) January monetary policy decision.
And there goes Wall Street's reflation trade.
The furor surrounding GameStop and its stock price has consumed social media, business television, and the hopes and dreams of many retail investors. After noting reports that some traditional brokers were limiting access to GameStop and other so-called meme stocks, TechCrunch was curious what the newer, app-based investing services were doing for their own users. A spokesperson for M1 Finance, a Midwest-based consumer fintech player that offers a basket of banking and investing services -- more on its growth here and here -- told TechCrunch via email that it wasn't taking "specific" steps regarding individual stocks.
Here's an FAQ about what's going on with the market and what "Wall Street Bets" is.
(Bloomberg) -- American Airlines Group Inc., the most shorted major U.S. carrier, surged after a mention on Reddit’s Wall Street Bets forum.“AAL the next GME?” said Reddit user u/cardiffgiantthe1st in an online discussion Wednesday, referring to the stock tickers of American and GameStop Corp., the video-game retailer that has quintupled in value this week alone.American’s stock gain adds to a flurry of share increases this week as Reddit-fueled retail traders take on short sellers and drive up prices. With stock after stock, legions of day traders have identified companies with high levels of short interest and piled in. In the case of GameStop, the soaring price has forced many short sellers to give up their positions.American rose 6.6% to $16.56 at the close in New York, the most since Dec. 3, after paring gains from an intraday surge of as much as 15%. Other companies on a Standard & Poor’s index of big U.S. airlines fell.The Fort Worth, Texas-based carrier declined to comment.The gain isn’t “justified by anything fundamental,” Darryl Genovesi, an analyst at Vertical Research Partners, said in an email. He expressed the same view about the stock surge during the session of another company he covers, Virgin Galactic Holdings Inc.Short-Squeeze RiskShort interest as a percentage of American’s free float is about 29%, according to data from S3 Partners. No other major U.S. airline has short interest of more than 5%.American is scheduled to report fourth-quarter earnings on Thursday. Like its rivals, the airline has been contending with the unprecedented collapse of air travel because of the coronavirus pandemic.Following American’s advance, CFRA Research changed its recommendation on the shares to hold from strong sell and lifted its price target to $19 from $8.“We think the stock is a high risk for one of the recent retail-investor-driven short squeezes we’ve seen play out,” CFRA analyst Colin Scarola wrote in a client note.The firm also elevated Spirit Airlines Inc. from sell to hold for the same reason. Short interest is about 16% of Spirit’s free float, according to Vertical Research.(Updates from 8th paragraph with CFRA comments on American, Spirit.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The ability of members of U.S. Congress to buy and sell stocks has been controversial over the years. One of its most prominent members made some purchases in December that could benefit from the new Biden administration. What Happened: It was revealed over the weekend that Speaker of the House and California Rep. Nancy Pelosi purchased 25 call options of Tesla Inc (NASDAQ: TSLA). The purchases could have been done by Pelosi or her husband Paul, who runs a venture capital firm. The options were bought at a stake price of $500 and expiration of March 18, 2022. Pelosi paid between $500,000 and $1,000,000 for the options, according to the disclosure. Pelosi also disclosed that she bought 20,000 shares of AllianceBernstein Holdings (NYSE: AB), 100 calls of Apple Inc (NASDAQ: AAPL) and 100 calls of Walt Disney Co (NYSE: DIS). Tesla shares have risen from $640.34 at the time the calls were purchased to over $890 today. The call options were valued at $1.12 million as of Monday. Related Link: How The 2020 Presidential Election Could Impact EV, Auto Stocks Why It’s Important: The purchases by Pelosi are questionable as arguments could be made that the companies stand to benefit from new President Joe Biden’s agenda. Biden's push for electric vehicles, which could include lifting the cap on sales, would give buyers tax credits again and is advantageous for Tesla. The president has also suggested a possible cash-for-clunkers program that could incentivize customers for trading in used vehicles towards the purchase of an electric vehicle. Pelosi could now have a conflict as she works to pass clean energy initiatives from which her family could profit. Former U.S. Senator David Perdue, a Republican, was criticized for making numerous stock trades during his six years in Congress. Perdue was the most prominent stock trader from Congress, making 2,596 trades during his time served. Some of Perdue’s transactions came while he was a member of several sub-committees. The Justice Department investigated Perdue and found no wrongdoing. What’s Next: It's legal for members of Congress and their spouses to own stocks. The transactions have to be disclosed per the STOCK (Stop Trading on Congressional Knowledge) Act that was passed in 2012. U.S. Senator Jeff Merkley of Oregon is one member of Congress who has co-sponsored legislation to ban the adding of individual stocks by members of Congress. Both Merkley and Pelosi are Democrats. Pelosi’s transactions could push for more regulations concerning stock purchases by members of Congress. (Photo: Official U.S. Embassy photograph by Archibald Sackey and Courage Ahiati.) See more from BenzingaClick here for options trades from BenzingaCharging Infrastructure SPAC Plays: Is EVGo The Best Of The Bunch?Barstool Fund Nears M For Small Businesses And Is About To Get A Huge Boost From Michigan© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Highly shorted stocks are being targeted by some investors trying to force people who have bet the prices will fall into covering. Watch Dillard’s and AMC Entertainment.
A clash of the classes — “the old proletariat vs bourgeoisie” — is at the heart of the ongoing GameStop (GME) short squeeze saga, says one WallStreetBets user.
Robinhood CEO Vlad Tenev explained how many retail investors on his platform feel — and how that relates to the GameStop trade. What's happening now, he says, is also not representative of the company's user base.
(Bloomberg) -- A horde of traders on Reddit that see themselves as sticking it to the establishment by hunting for heavily shorted stocks is adding billions to the wealth of some of the world’s ultra-rich.Larry Chen, chairman and chief executive officer of GSX Techedu, saw his fortune increase $4.2 billion Wednesday as U.S. depository shares of the Beijing-based online tutoring company rose 36%, pushing his net worth to $15.6 billion on the Bloomberg Billionaires Index.Fellow Chinese billionaire Wang Jianlin’s wealth surged by $773 million through his stake in AMC Entertainment Holdings Inc. A flood of retail traders caused the stock to spike as much as 310% even as the broader market slumped. Hedge funds such as Mudrick Capital, which owned 4.6 million shares in the cinema operator as of Jan. 4, also got a boost.Chewy Inc. co-founder Ryan Cohen added about $1.8 billion with his holding in GameStop Corp., the video-game retailer that has surged more than 1,700% this year. Fellow investor Donald Foss, founder of subprime auto lender Credit Acceptance Corp., now owns a stake worth about $1.2 billion, according to the Bloomberg index.Even the head of Tootsie Roll Industries Inc. benefited, with CEO Ellen Gordon’s fortune rising $185 million as the confectioner’s shares rose to a record, while National Beverage Corp. founder Nick Caporella saw his net worth jump $1.8 billion to $6.8 billion as shares of the maker of LaCroix soda water climbed 40%.Meteoric RallyDay traders have been piling into previously unloved tickers favored by short sellers in recent sessions, driving them to record highs. The meteoric rally of GameStop has already worn down some institutional investors, with Melvin Capital closing out its short position by Wednesday.The hunt for heavily shorted stocks is being led by the Reddit forum WallStreetBets, which boasts roughly 2.8 million members. Some of the more outspoken have taken an activist stance, portraying their campaign as taking a stand against such societal problems as financial inequality and generational injustice.Gordon owns just over half of Tootsie Roll Industries’ common shares and 81% of its B shares, according to company filings. Her stake in the maker of Tootsie Pops, Junior Mints and Dubble Bubble gum, which she owns both directly and on behalf of other family members, is now worth $1.8 billion.Cohen disclosed an investment in GameStop in August. By December, he’d purchased 9 million shares in the retailer for a total cost of $76 million and now holds a stake worth about $3.1 billion. GameStop shares rose 135% to a record $347.51 in New York after triggering three volatility halts.Wang, the founder of closely held conglomerate Dalian Wanda Group, now owns a stake worth about $1 billion in AMC, which climbed to $19.90 in New York trading, the most since October 2018. Wang has a net worth of $14.4 billion, according to the Bloomberg Billionaires Index.(Updates gains starting in the second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The past year or so has thrown a lot of people for a loop, but these penny stocks could weather the tumultuous environment.
Tesla just released its latest earnings report, and the results indicate that Elon Musk's bets on energy storage and solar are beginning to pay off. The storage business was the star of the company's power plays in the fourth quarter, with quarterly year-on-year growth approaching 200%. For the first time, our total battery deployments surpassed 3 GWh in a single year, which is an 83% increase compared to the prior year.
Reddit and its r/wallstreetbets forum have become powerful, unpredictable forces in the market, sending certain stocks unexpectedly to the moon.
Apple Inc on Wednesday reported holiday quarter sales and profits that beat Wall Street expectations, as new 5G iPhones helped push handset revenue to a new record and sparked a 57% rise in China sales. Apple shipped its iPhone 12 lineup several weeks later than usual, but an expanded number of models and new look tapped pent up demand for upgrades, especially in China. The company also posted strong sales of its Mac laptops and iPads in the quarter, driven by consumers working, learning and playing from home during the pandemic.