(Bloomberg) -- For once, Main Street is beating Wall Street.In a matter of weeks, two hedge-fund legends -- Steve Cohen and Dan Sundheim -- have suffered bruising losses as amateur traders banded together to take on some of the world’s most sophisticated investors. In Cohen’s case, he and Ken Griffin ended up rushing to the aid of a third, Gabe Plotkin, whose firm was getting beaten down.Driven by the frenzied trading in GameStop Corp. and other stocks that hedge funds have bet against, the losses suffered over the past few days would rank among the worst in some of these money managers’ storied careers. Cohen’s Point72 Asset Management has declined 10% to 15% so far this month, while Sundheim’s D1 Capital Partners, one of last year’s top-performing funds, is down about 20%. Melvin Capital, Plotkin’s firm, had lost 30% through Friday.It’s a humbling turnaround for the hedge fund titans, who in 2020 staged a comeback by pouncing on the wild markets caused by the Covid-19 pandemic. But that crisis helped push thousands if not millions of retail traders into the U.S. stock market, creating a new force that for now the professionals seem powerless to combat.Their assailants are a collection of traders using Reddit’s wallstreetbets thread to coordinate their attacks, which seem to be focused on stocks known for being held short by hedge funds. The most prominent is GameStop, the beleaguered brick-and-mortar retailer that’s soared more than 1,700% this month, but other targets include AMC Entertainment Holdings Inc. and Bed Bath & Beyond Inc.The pain is likely spreading across the hedge fund industry, with rumors swirling among traders of heavy losses at multiple firms. The Goldman Sachs Hedge Industry VIP ETF, which tracks hedge funds’ most-popular stocks, tumbled 4.3% on Wednesday for its worst day since September.Fund managers covered their money-losing short sales while trimming bullish bets for a fourth straight session Tuesday. Over that stretch, their total outflows from the market reached the highest level since October 2014, data compiled by Goldman’s prime-brokerage unit show.D1, which was founded in 2018 and had about $20 billion in assets at the start of the year, is buffeted to some degree from the attacks because private companies account for roughly a third of its holdings, and the firm has been reducing its exposure, according to people familiar with the matter. The fund is closed to new investments and has no plans to open for additional capital, one of the people said, asking not to be named because such decisions are confidential.D1’s loss, described by people briefed on the situation, contrasts with a 60% gain for Sundheim, 43, during last year’s pandemic turmoil.Melvin on Monday took an unheard-of cash infusion from its peers, receiving $2 billion from Griffin, his partners and the hedge funds he runs at Citadel, and $750 million from his former boss, Cohen.“The social media posts about Melvin Capital going bankrupt are categorically false,” a representative said. “Melvin Capital is focused on generating high-quality, risk-adjusted returns for our investors, and we are appreciative of their support.”Until this year, Plotkin, 42, had one of the best track records among hedge fund stock pickers. He’d worked for Cohen for eight years and had been one of his biggest money makers before leaving to form Melvin. He’s posted an annualized return of 30% since opening, ending last year up more than 50%, according to an investor.Another fund, the $3.5 billion Maplelane Capital, lost about 33% this month through Tuesday in part because of a short position on GameStop, according to investors.Representatives for Point72, D1 and Maplelane all declined to comment.The struggles at some of the biggest hedge funds may have contributed to Wednesday’s 2.6% drop in the S&P 500, its worst decline since October. One theory behind the decline is that funds are selling long bets to get the cash they need to cover their shorts.Cohen, 64, is perhaps the best-known victim of this year’s turmoil so far. The new owner of the New York Mets, whose fund gained 16% in 2020, has become a national figure after beating competition from Jennifer Lopez and Alex Rodriguez to buy the ball club.Late Tuesday, Cohen broke his usual habit of only tweeting about the Mets. “Hey stock jockeys keep bringing it,” he wrote on the social media platform.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.
Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk expressed his disappointment with Discord after the platform took down WallStreetBets from its platform. What Happened: “Even Discord has gone corpo ...,” the world’s richest person said in a tweet late Wednesday. Discord had taken down WallStreetBets earlier in the evening, saying the community continued to allow hateful and discriminatory content despite repeated warnings. The company said the action didn’t have any relation to WallStreetBets’ role in the surge of GameStop Corp.’s (NYSE: GME) stock. WallStreetBets moderators described the Discord action as “pretty unethical.” “I am not impressed with them destroying our community instead of stepping in with the wrench we may have needed to fix things, especially after we got over 1,000 server boosts,” one of the group moderators said. The community also went briefly private on Reddit as it looked to ramp up moderation and avoid a similar fate on the platform as Discord. “We've got so many comments and submissions that we can't possibly even read them all, let alone act on them as moderators,” u/zjz, a community moderato, added. Why It Matters: Musk had earlier touted support for the WallStreetBets community on Tuesday evening, sending the stock soaring further. Gamestonk!! https://t.co/RZtkDzAewJ — Elon Musk (@elonmusk) January 26, 2021 GameStop, BlackBerry Ltd. (NYSE: BB), Nokia Oyj (NYSE: NOK), AMC Entertainment Holdings Inc (NYSE: AMC) and other stocks seeing the short-squeeze interest of the Reddit community tanked in the after-hours session Wednesday after Discord’s action. Price Action: GameStop traded 16% lower at $292 after a 134.84% surge during the regular session. BlackBerry tanked 9.8% at $22.6 after a 32.6% spike during regular hours. Nokia traded 9.5% lower at $5.93 after a 38.5% surge during the regular session. AMC shares tanked 26.6% after a 301.21% surge during the regular session. Photo courtesy: Forbes via Wikimedia See more from BenzingaClick here for options trades from BenzingaDeFi Cryptocurrencies Refuse To Take A Backseat Amid GameStop Mania, Hit All-Time HighWhy Scaramucci Sees GameStop Rally As A Positive Backdrop For Bitcoin© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Did the stock market bubble just pop?
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 highly shorted companies like Bed Bath & Beyond, National Beverage, and AMC Entertainment have surged alongside GameStop in recent trading.
Apple posted record Q1 earnings on the strength of iPhone sales.
Stocks sold off hard after the Federal Reserve monetary policy decision Wednesday, sending the Dow Jones Industrial Average down over 600 points.
Plug Power (PLUG) shares have kicked off 2021 with a bang, rising nearly 90% since the turn of the year. The PLUG narrative is benefiting from favorable macro conditions; A new U.S. administration intent on forwarding the case for clean energy is acting as a strong catalyst, driving positive investor sentiment toward the stock. Adding to the good news, the company said it has exceeded its 2020 gross billings target, while it expects to beat its previous 2021 estimates. The company previously guided for $450 million in billings in 2021, but now anticipates $475 million, a 5.5% increase. Further ahead, by 2024, PLUG is targeting $1.7 billion in sales, 40% above the previous estimate. Add into the mix a recent $1.5 billion investment in return for a 10% stake in the company from South Korea’s SK Group, and a joint venture with French automaker Renault to develop hydrogen-powered light commercial vehicles, and it’s no wonder J.P. Morgan analyst Paul Coster calls the company a “best-in-class long-term idea.” “A good story keeps getting better,” Coster said. “With PLUG capitalizing on its leadership position in Hydrogen energy and mobility solutions by nailing down customers and partners that expand the TAM, improve visibility and de-risk execution. The firm is also capitalizing on its soaring market cap to issue shares, building a balance sheet that will permit the company to execute its growth strategy with confidence.” However, while the analyst anticipates “meaningful profitability in 2023-24,” the stock appears “richly valued” compared to peers. As a result, Coster rates PLUG shares a Neutral (i.e. Buy), along with a $70 price target. This figure implies ~9% upside from current levels. (To watch Coster’s track record, click here) “We look for a pullback as an opportunity to get into this stock,” the analyst summed up. While Coster sits on the sidelines waiting for PLUG stock to reset itself, most analysts remain on board. According to TipRanks analytics, out of 12 analysts, 10 say Buy while 2 suggest Hold. But there’s a catch; the analysts, while keen on the company, evidently think shares have soared enough as the $60 average price target indicates. (See PLUG stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
And there goes Wall Street's reflation trade.
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.
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.
The past year or so has thrown a lot of people for a loop, but these penny stocks could weather the tumultuous environment.
(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.
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.
A slugfest between Wall Street and Main Street took an unexpected turn late on Wednesday after moderators of a stock trading forum that has helped fuel massive rallies in the shares of GameStop temporarily closed its doors. Shares of GameStop, AMC Entertainment, Koss Corp and BlackBerry all dropped at least 20% moments after the shuttering of the forum, highlighting the role it has played in fueling stock rallies that many say have been driven primarily by retail investors.
Here's an FAQ about what's going on with the market and what "Wall Street Bets" is.
Reddit and its r/wallstreetbets forum have become powerful, unpredictable forces in the market, sending certain stocks unexpectedly to the moon.
(Bloomberg) -- Global stocks fell further from records amid a panoply of concerns spanning earnings, valuations, coronavirus trends and the fallout of frenzied retail trading in parts of the U.S. market. The dollar rose.The Stoxx Europe 600 Index slumped at the open as investors mulled earnings beats from chipmaker STMicroelectronics NV and Diageo Plc against a miss from Swatch Group AG and a revenue drop at EasyJet Plc. Also weighing on sentiment is an ongoing dispute between AstraZeneca Plc and the European Union over vaccine supplies for the region.U.S. equity futures slipped after disappointment over results from the likes of Apple Inc. and Tesla Inc. sent shares sliding after market. On Wednesday, the S&P 500 slumped 2.6% in its worst rout since October as retail traders piled into heavily-shorted companies, sparking losses at hedge funds and causing turmoil in parts of the market. Treasury yields dipped toward the 1% level after Federal Reserve officials left their main interest rate unchanged and made clear the central bank was nowhere near exiting massive support for the economy. Stocks in Hong Kong and Australia saw the bulk of Asian losses.Stocks have stumbled after a prolonged rally that spurred talk of possible asset bubbles and predictions of a pullback given a raging pandemic and patchy rollout of vaccines. Adding to investor anxiety is a wave of retail traders bidding up heavily-shorted shares, whipsawing stocks around the globe.“The combination of a short covering in U.S. equity markets and delays in vaccines distribution have led U.S. and European equity markets 2 to 3% down,” according to Sebastien Galy, macro strategist at Nordea Funds. “One important point is that a dovish Fed still could not turn around the market, a signal that this may last a few days.”Why GameStop Furor Is Hurting Stock MarketsSoaring volatilities are forcing investors to cut leverage, and that means a large amount of cash is exiting the market. Big institutional names are losing a lot of money very quickly. The stock-market “game” has changed radically over the past week. That raises uncertainty and has risk managers very nervous.Mark Cudmore, Bloomberg Macro Strategist.Click here for the full story.These are some key events coming up in the week ahead:Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Thursday.U.S. personal income, spending and pending home sales come Friday.These are the main moves in markets:StocksFutures on the S&P 500 Index decreased 0.3% as of 8:20 a.m. London time.The Stoxx Europe 600 Index dipped 1%.The MSCI Asia Pacific Index fell 1.9%.The MSCI Emerging Market Index fell 1.7%.CurrenciesThe Bloomberg Dollar Spot Index advanced 0.2%.The euro decreased 0.1% to $1.2103.The British pound sank 0.2% to $1.3655.The onshore yuan strengthened 0.1% to 6.478 per dollar.The Japanese yen weakened 0.2% to 104.28 per dollar.BondsThe yield on 10-year Treasuries sank one basis point to 1.01%.The yield on two-year Treasuries was unchanged at 0.12%.Germany’s 10-year yield dipped less than one basis point to -0.55%.Britain’s 10-year yield declined one basis point to 0.262%.Japan’s 10-year yield fell one basis point to 0.04%.CommoditiesWest Texas Intermediate crude declined 0.7% to $52.48 a barrel.Brent crude dipped 0.6% to $55.48 a barrel.Gold weakened 0.2% to $1,839.86 an ounce.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.
What are the fastest-growing stocks to watch for Q4 earnings season? Here's a list of 17 stocks expecting up to 966% EPS growth.
At least one major brokerage house is starting to respond to a frenetic surge in the price of shares of companies that has been attributed to rabid buying by individual investors on social-media platforms.