Article: Want to Make $1 Million? Market Manipulation Is Back! (Thanks to Social Media)

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Want to Make $1 Million? Market Manipulation Is Back! (Thanks to Social Media)

Thomas Yeung, 16 July 2021

When Keith “Roaring Kitty” Gill announced he was buying GameStop (NYSE:GME) shares and options on Reddit’s r/WallStreetBets, regulators might have considered his outrageous claims as parody — speech protected by First Amendment rights. Who could take $20 calls on GME seriously when the stock was trading at $5?

Since then, other social media forums have blurred the lines between satire and intentional deception. This week, shares in SCWorks (NASDAQ:WORX) doubled after traders on Discord and Twitter banded together to push prices higher. MINM, DTSS and an alphabet soup of other small-cap stocks have followed the same path Continue reading “Article: Want to Make $1 Million? Market Manipulation Is Back! (Thanks to Social Media)”

Article: Robinhood Gets Ready for the Meme Stock World It Created

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Robinhood Gets Ready for the Meme Stock World It Created

Annie Massa, 14 July 2021

Hi all, it’s Annie from Bloomberg’s investing team. Soon, Robinhood Markets Inc. will go public. The debut—which could happen in the coming weeks—will see Robinhood entrust its share price to the same retail investors who have been using its app to roil markets.

The free stock trading app has been around for eight eventful years. During the pandemic, Robinhood traders congregated on Reddit message boards and drove wild swings in the price of companies like GameStop Corp. and AMC Entertainment Holdings Inc. Then, when Robinhood put limits on customer purchases of those stocks, the startup incurred social media wrath, along with some lawsuits. Continue reading “Article: Robinhood Gets Ready for the Meme Stock World It Created”

Article: GameStop and AMC turn around big on Thursday as retail investors unsubtly remind Wall Street they are going nowhere

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GameStop and AMC turn around big on Thursday as retail investors unsubtly remind Wall Street they are going nowhere

Thornton McEnery, 08 July 2021

Retail traders spent Thursday morning buying the dip created by all the people digging the graves of meme stocks on Tuesday and Wednesday.

Shares of GameStop GME, -0.08% and AMC Entertainment AMC, -3.65% started the holiday-shortened week in something of a nosedive, with both falling sharply from Tuesday morning into midday Thursday before sudden potent rallies fueled by Reddit chatter and Twitter hashtags saw both stocks recover dramatically, and AMC almost erase its weekly loss entirely before falling back a bit in the afternoon. Continue reading “Article: GameStop and AMC turn around big on Thursday as retail investors unsubtly remind Wall Street they are going nowhere”

Article: Gamestop – Exchange leaders say GameStop saga highlights regulatory challenges

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Gamestop – Exchange leaders say GameStop saga highlights regulatory challenges

ALEX LOWE, 06 July 2021

NEW YORK (Reuters) – The recent trading frenzy around GameStop Corp and other so-called “meme” stocks highlights shortcomings and challenges in the U.S. markets as retail investors become a bigger presence, exchange leaders said on Tuesday.

“The regulatory structure of the U.S. equity markets, in my mind, is flawed,” Jeff Sprecher, chief executive of New York Stock Exchange owner Intercontinental Exchange Inc, said on a panel at the Future Industry Association’s virtual FIA Boca conference. Continue reading “Article: Gamestop – Exchange leaders say GameStop saga highlights regulatory challenges”

Article: Gamestop – AMC, other ‘meme’ stocks jump; regulator signals concern

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Gamestop – AMC, other ‘meme’ stocks jump; regulator signals concern

ALEX LOWE, 04 July 2021

Shares of AMC Entertainment Holdings Inc (AMC.N) and other “meme stocks” jumped on Monday, extending a rally in social-media favorites into a third week as message boards hummed with talk of squeezing Wall Street short-sellers.

The sharp gains prompted the U.S. Securities and Exchange Commission to say it was looking into signs of market manipulation given the “volatility in certain stocks.” The volatility has challenged analysts, and two of them in the past week have stopped covering video game retailer GameStop, whose shares soared in January in a retail-driven rally. Continue reading “Article: Gamestop – AMC, other ‘meme’ stocks jump; regulator signals concern”

Article: Robinhood Says U.S. Demanded Access to CEO Tenev’s Phone Records

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Robinhood Says U.S. Demanded Access to CEO Tenev’s Phone Records

Jesse Westbrook, 02 July 2021

Robinhood Markets Inc., dogged by fines and regulatory scrutiny, revealed several new inquires from state and federal watchdogs as it seeks to sell shares in one of the year’s most anticipated public offerings.

Among the fresh disclosures made in its registration statement: U.S. prosecutors demanded access to Chief Executive Officer Vlad Tenev’s mobile phone, New York is poised to penalize the brokerage for alleged money-laundering lapses and brokerage regulators called it out for not reporting trades. Continue reading “Article: Robinhood Says U.S. Demanded Access to CEO Tenev’s Phone Records”

Article: AMC Stock: Brace For The Mother Of All Short Squeezes

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AMC Stock: Brace For The Mother Of All Short Squeezes

BERNARD ZAMBONIN AND DANIEL MARTINS, 01 July 2021

Reddit forum discussions and coordinated trades have been rooted in the community’s disdain for so-called “toxic market participants”. These toxic players tend to be hedge funds and a few others on Wall Street who make sizable bearish bets against certain stocks through naked shorting.

This practice, considered illegal after the subprime crisis in 2008, consists of borrowing shares to sell short, but without these shares existing. This is only possible in the very short term and due to technical loopholes in trading, as transactions take days to clear the system. Continue reading “Article: AMC Stock: Brace For The Mother Of All Short Squeezes”

Article: Robinhood’s Luster Stained Again With a Record $70 Million Fine

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Robinhood’s Luster Stained Again With a Record $70 Million Fine

Annie Massa and Benjamin Bain, 30 June 2021

Robinhood Markets Inc. unleashed a revolution, marshaling throngs of new traders to financial markets in an upside-down year. But the free trading app’s breakneck growth hurt the same small-time investors it sought to empower.

That’s the accusation leveled by Wall Street’s self-funded watchdog, which extracted almost $70 million from the brokerage in a record settlement Wednesday, including a $57 million fine and about $12.6 million in payments to aggrieved customers. It follows Robinhood’s meteoric rise against the backdrop of the Covid-19 pandemic and the frenzy over hot stocks such as GameStop Corp. that warped the realm of retail trading. Continue reading “Article: Robinhood’s Luster Stained Again With a Record $70 Million Fine”

Article: GameStop Short Sellers Flee As Short Interest Drops By $880 Million In 2 Weeks

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GameStop Short Sellers Flee As Short Interest Drops By $880 Million In 2 Weeks

Ramish Zafar, 30 June 2021

Reddit forum discussions and coordinated trades have been rooted in the community’s disdain for so-called “toxic market participants”. These toxic players tend to be hedge funds and a few others on Wall Street who make sizable bearish bets against certain stocks through naked shorting.

This practice, considered illegal after the subprime crisis in 2008, consists of borrowing shares to sell short, but without these shares existing. This is only possible in the very short term and due to technical loopholes in trading, as transactions take days to clear the system. Continue reading “Article: GameStop Short Sellers Flee As Short Interest Drops By $880 Million In 2 Weeks”

Article: Meme stocks show that ‘community’ is profitable: Reddit co-founder

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Meme stocks show that ‘community’ is profitable: Reddit co-founder

Thomas Hum, 28 June 2021

As trading platforms like Robinhood create a rise in retail investor market participation and spark a renewed interest in shares of companies dubbed “meme stocks” like GameStop (GME), BlackBerry (BB), and AMC (AMC), the world of finance is seeing an intersection with the social media sphere.

“What you’re seeing is a much larger trend here,” Alexis Ohanian, founder of venture capital firm Seven Seven Six and co-founder of Reddit, told Yahoo Finance Live. “It is the intersection of community and capital. It’s the intersection of social media and finance.” Continue reading “Article: Meme stocks show that ‘community’ is profitable: Reddit co-founder”

Article: Charles Schwab Raises Margin Requirements For AMC & GME Stock

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Charles Schwab Raises Margin Requirements For AMC & GME Stock

FRANK NEZ, 27 June 2021

Charles Schwab has raised margin requirements for short sellers shorting AMC and GME stock. The broker is adjusting 100% margin requirements for AMC on all long positions, and 200% on short term positions.

As for GameStop, the margin requirement is 100% on all long positions and a whopping 300% on short term positions. Community, this is massive. It’s the time we’ve all been waiting for. Lets go over what all of this means. Continue reading “Article: Charles Schwab Raises Margin Requirements For AMC & GME Stock”

Article: TLC: THE LONG CON: The markets are frothing with liquidity. PART 1

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TLC: THE LONG CON: The markets are frothing with liquidity. PART 1
Reddit: u/con101smd, 22 June 2021

TLC: THE LONG CON:

The markets are frothing with liquidity.

How Wall St. conquered the wild west of crypto by laundering funds obtained from illegal naked short selling practices through stock market exchanges worldwide.
Mobile Edition & full PDF: https://docs.google.com/document/d/1fdZV5B6RtyVurxcVsXAOtWNn5NE8BZS1TPu24ZAzLkI/edit?usp=sharing

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Article: Reddit Hates Short Sellers, But the Stock Market Needs Them

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Reddit Hates Short Sellers, But the Stock Market Needs Them

Brandon Kochkodin, 23 June 2021

There’s something a little weird about short selling. Shorting—or betting that a stock’s price will fall—is a feature of finance that doesn’t have a close analogue in the real-world economy.

Buying a stock you like isn’t much different from purchasing a product that catches your eye. But if you’re walking through the local grocery store and see an item that sets your stomach turning—say, ketchup-flavored potato chips—you don’t stand in the aisle waving off other customers, telling them how bad it is. You don’t try to crush the bag. You just think, “Who in the world eats this … ” and go on your merry way without putting it in your cart. Continue reading “Article: Reddit Hates Short Sellers, But the Stock Market Needs Them”

Article: How the GameStop Hustle Worked

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How the GameStop Hustle Worked

Lucy Komisar, 22 June 2021

I have written previously for the Prospect about the frenzy over GameStop (GME), the video game and electronics company. By now, you know the story. Millions of retail investors made the stock soar by over 1,000 percent in January 2021. This brought disaster upon a handful of hedge funds that had bet on GameStop’s stock to drop. According to Markets Insider, one analyst estimated losses in February of roughly $19 billion. The hedge fund Melvin Capital reportedly closed out its position after taking a drubbing of 51 percent. Another fund, Maplelane, lost 40 percent.

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Article: Former SEC chair on the market risks even meme stock traders can’t afford to ignore

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Former SEC chair on the market risks even meme stock traders can’t afford to ignore

Eric Rosenbaum, 20 June 2021

The Wall Street establishment and the Reddit, Robinhood-fueled meme stock traders don’t see eye to eye, on just about anything. In fact, rolling eyes at the stock market’s traditional ways is inherent in trades like GameStop and AMC Entertainment.

Warnings from the market greats, like Warren Buffett, may as well be a badge of honor among the new traders. But one thing Buffett hasn’t noted in his criticisms of the “casino” atmosphere of this bull market and companies like Robinhood, which he has thoroughly beat on, is that when he was a young investor himself he had a fondness for “cigar butt” stocks — the dregs of the market, companies with a few puffs left in them — before he graduated to a more refined kind of investing that made him a billionaire. And that Buffett footnote raises an important point about the market’s newest investors. Continue reading “Article: Former SEC chair on the market risks even meme stock traders can’t afford to ignore”