Tag: Reddit

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Article: These 2 Meme Stocks Won’t Survive the Next Stock Market Crash

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These 2 Meme Stocks Won’t Survive the Next Stock Market Crash

Leo Sun,  26 March 2021

The Reddit-fueled short squeezes of GameStop (NYSE:GME) and other heavily shorted stocks earlier this year thrust the idea of “meme stocks” — equities that get aggressively promoted on social media platforms — into the broader market’s spotlight.

Some of those meme stocks actually have solid underlying businesses that could allow them to resist a market downturn. However, there are plenty of others with businesses that can’t possibly support their frothy valuations. Let’s take a look at two meme stocks that will likely burn their shareholders the next time the market stumbles.

1. Naked Brand
Shares of Naked Brand Group (NASDAQ:NAKD), a New Zealand-based retailer of intimate apparel and swimwear, surged from about $0.07 last October to an all-time high of $3.40 in late January. Nearly everyone who chased that rally and hung on got burned — the stock now trades at about $0.77 per share.

Naked’s rally had nothing to do with its fundamentals. It was identified as a short squeeze target on Reddit, and its name was cited in discussions about “naked shorting” — the illegal practice of shorting a stock without borrowing it first. Those discussions inexplicably evolved into a movement to promote the stock on Reddit, which caused it to rally alongside GameStop and other meme stocks in January.

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Article: GameStop hearing targets stock lending, social media

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GameStop hearing targets stock lending, social media

Michael Shaw, 23 March 2021

Two issues emerged from a congressional hearing on the volatile trading of GameStop Corp. shares: Lawmakers and regulators need a greater understanding of how technology helped foster the frenzy, and regulators need systems to understand such events — and possibly to manage them.

House Financial Services members and witnesses spent most of their time at the hearing last week focusing on the role of short-selling in the GameStop trading frenzy in January. They specifically looked at the source of securities used to take short positions, and they looked at how a bunch of retail investors seemingly were able to outmaneuver the professionals. Continue reading “Article: GameStop hearing targets stock lending, social media”

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Article: Meme stocks loom large in the CSA’s short-selling review

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Meme stocks loom large in the CSA’s short-selling review

James Langton, 22 March 2021

When a group of retail traders used Reddit to gleefully gang up on a handful of hedge funds in January, giving birth to the concept of “meme” stocks, they cranked up an already simmering debate about proper public discourse related to trading. In Canada, a consultation regarding activist short-sellers is the focus of that debate.

Late last year, the Canadian Securities Administrators (CSA) published a consultation paper on the role and regulation of activist short-sellers — traders who publicly air their negative views on the stocks they’re shorting.

Defenders of the practice maintain that vocal short-sellers are the only thing standing between unrelenting upside hype and ordinary investors — i.e., their skepticism and scrutiny help expose corporate fraud and misconduct, aiding naive regulators and investors alike. Continue reading “Article: Meme stocks loom large in the CSA’s short-selling review”

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Article: Why Is Everyone (Still) Talking About GameStop Stock?

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Why Is Everyone (Still) Talking About GameStop Stock?

Keith Noonan, 19 March 2021

GameStop (NYSE:GME) has to be 2021’s most interesting stock. The video game retailer started to pick up momentum ahead of the launch of new game consoles from Sony and Microsoft last year, and over the past two months, short-squeeze mania and other big developments have led to incredible swings for the the company’s share price.

GameStop’s stock climbed as high as $483 per share during the height of short-squeeze mania. While the stock briefly returned to trading in the range of $50 per share, it’s bounced back once again and traded at $201.75 at Thursday’s close. That price represents a 971% increase year to date and a 4,715% increase from the $4.19 share price the stock had one year ago.

Why is GameStop surging, and what comes next?

How did we get here?
The start of GameStop’s improbable, supercharged rally can be traced back to the introduction of Sony’s PlayStation 5 console and Microsoft’s Xbox Series X and Series S platforms in 2020. New console launches have historically led to a cyclical upcycle for GameStop’s business and stock performance.

Pricing momentum created by the new hardware launches was further intensified by news that activist investor and Chewy co-founder Ryan Cohen was amassing a large stake in the company and would advocate for pushing the business toward an e-commerce focus.

From there, Reddit’s WallStreetBets group began championing the stock as a potential target for a huge short squeeze. Social media users noticed that enormous short interest had amassed against GameStop — and that a massive run for the stock could potentially be generated through a bit of favorable news and coordinated buying.

Prior to the first major short squeeze, GameStop had about 50 million shares of its stock outstanding. At the same time, roughly 70 million shares of the company’s stock had been sold short — meaning that investors had placed bets against more shares of the company’s stock than actually existed.

Short interest exceeding the company’s actual outstanding share count was made possible through a practice called naked short selling, which allows bets to be placed against shares that haven’t actually been borrowed. WallStreetBets members wound up being right about the squeeze, and GameStop bulls notched incredible gains as short-sellers were forced to buy back the stock at elevated levels in hopes of avoiding massive losses.

A combination of continued short-squeeze momentum and indications that the company would be aggressively pursuing its pivot to online retail have added new chapters to the story of GameStop’s incredible rally, and it currently stands as one of the best-performing stocks of the year. Cohen has been appointed chairman of a new committee to accelerate the business’s online retail push, a bounce for the stock has once again attracted new short interest, and the GameStop saga rages on.

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Article: GameStop stock surge lingo: Here’s what Reddit’s WallStreetBets vocabulary means

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GameStop stock surge lingo: Here’s what Reddit’s WallStreetBets vocabulary means

Katie Conner, 19 March 2021

Reddit’s community, WallStreetBets, is still assisting in the rise of GameStop’s stock, which is currently sitting at $272 per share and even hit an all-time high last week. Reddit users are battling it out with Wall Street to keep GameStop’s stock prices soaring while Wall Street expected a crash. Small investors are using Reddit communities to drive “meme stocks,” causing short sales and https://www.investopedia.com/terms/s/shortsqueeze.asp. And it’s not just GameStop. Other companies, like AMC and Nokia, have also been affected by the coordinated surge.

No, this doesn’t mean you should necessarily drop everything and fully invest in the stock of the moment. Some are calling the market manipulation a “Ponzi scheme,” and the stock price will likely even out once the hullabaloo dies down.

In fact, broker TD Ameritrade restricted trading of the GameStop and AMC stocks on Jan. 26 and continues to post an advisory note to clients about market volatility. Trading app Robinhood followed suit on Jan. 27 in response to the runaway growth — the company got itself into trouble by restricting stock trades and will be closely reviewed by the SEC (It’s currently limiting buys on AMC and GameStop stocks). The White House has said it’s monitoring the situation.

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Article: $COTI — the undeniable SCAM run by criminals — Investigation Report

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$COTI — the undeniable SCAM run by criminals — Investigation Report

api3cloud, 18 March 2021

Part 1
‘’The criminals’’

I start this article with a disclaimer that this investigative research would not be possible without the help of many. A combined effort on Reddit, Discord, Telegram and Twitter to put together information of undeniable official evidences that COTI is in fact an orchestrated fraud operated by Israeli well known Binary Options criminals. All information provided is backed by public sources and data. This is not FUD. These are undeniable public evidences that the COTI team tried to hide from the public for a long time, the victims of the soon to be known as one of the biggest crypto scams ever seen, need to be informed and law authorities need to act fast.

In this article I will deep dive on the extensive criminal background of COTI team.

When was COTI created? In 2017, the exact month Israel authorities banned Binary Options the COTI team needed the next scam to pull. ICOS were hot at the time, easy money and easy preys.

SIMONA WEINGLASS: Twitter @simonaweinglass /// Email simona@timesofisrael.com

A reputable white collar crime and corruption investigative journalist for the biggest newspaper of Israel, and the responsible for taking down COTI founders Binary Options scams back in 2017 reports

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Article: Stop the Game!: How To Chill Bubbles Sensibly

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Stop the Game!: How To Chill Bubbles Sensibly

John C. Coffee Jr., 17 March 2021

Much of the excited journalism on GameStop has focused on its asserted “Democratization” of the markets or the new “populism” sweeping Wall Street. This sort of commentary is the product of journalists being on tight publication deadlines and willing to generalize based on a data sample of one. Those of us who take a longer-term view see it differently: Bubbles are bad; GameStop was a bubble; and the influences that caused it (which were indeed new and novel) need to be chilled. Those who disagree with the last sentence should probably stop reading here.

But how you chill a bubble is not a simple question. Many commentators have unrealistic solutions: (1) Prosecute everyone (or at least those on Reddit) for manipulation; and (2) subject websites to tight regulatory controls. Such solutions, proposed by those who can reach legal conclusions faster than the average knee can jerk, face formidable obstacles. First, manipulation is a crime of intent that requires the actor to attempt willfully to move a stock price (up or down) to an “artificial” price that the actor knows is different than that which would be reached by the normal intersection of supply and demand in a fully informed market. Currently, the circuits are split, but both the U.S. Courts of Appeals for the Second Circuit and D.C. Circuit insist that the defendant must intentionally send a false pricing signal (such as a wash sale or a factually false statement). See Fezzandi v. Bear Stearns & Co., 777 F.3d 566 (2d Cir. 2015); Koch v. SEC, 793 F.3d 147 (D.C. Cir. 2015). Second, the First Amendment largely precludes any attempt to shut down social media. In addition, §230 of the Communications Decency Act gives immunity to websites, such as Reddit, for what their users say on them. Beyond that, mere statements of opinion—even manic opinions—are not fraudulent. Most of the lost souls on WallStreetBets sound like true believers, not cynical manipulators, and their prediction that GameStop was “going to the moon” were silly, but not fraudulent. According to Motley Fool, the average investor in a Robinhood account had an account balance (in 2020) between $1,000 and $5,000. A colleague tells me that his account balance on Draft Kings (a different betting venue) is greater than that. In short, Robinhood’s investors are not big-time and are probably feeling their losses keenly at this point.

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Article: The Next ‘Gamestop’: How China or Russia Could Attack Our Financial System

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The Next ‘Gamestop’: How China or Russia Could Attack Our Financial System

Robert Carlson, Gray Gaertner, 16 March 2021

Last week, the dramatic rise and fall in the price of Gamestop demonstrated how vulnerable the stock market is to social media speculation. U.S. regulators should now turn their attention to a greater risk—that in the near future, China, Russia, or another adversary could coordinate an unwitting mob to harm the American financial system.

The potential for financial warfare follows from a playbook that China, and especially Russia, have drawn from repeatedly to meddle in U.S. domestic politics. First, foreign state agents have used social media to spread disinformation or stoke existing grievances. Second, they have counted on naive users to share the original posts, allowing the content to reach a larger audience. Finally, they fan the flames to provoke action.

In 2016 and 2020, Russian propaganda decreased U.S. voters’ trust in their candidates and the political system. During last year’s protests over race and policing, foreign bots amplified instances of both racial discrimination and violent protests, further polarizing American society. Following Joe Biden’s electoral victory in November, Russian agents embraced false allegations of fraud, providing the rationale for an armed mob to assault the Capitol Building. China spends at least $10 billion per year on its own influence operations through the United Front Work Department, which promotes pro-Beijing narratives overseas.

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Article: Ignoring years of silver price manipulation, Orwellian CFTC now goes after Reddit Apes

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Ignoring years of silver price manipulation, Orwellian CFTC now goes after Reddit Apes

Ronan Manly, Bullion Star, 04 March 2021

On Monday 1 March, an article in Bloomberg Law by CFTC connected lawyers from law firm Clifford Chance revealed that the Commodity Futures Trading Commission (CFTC) is reportedly investigating retail silver trader activity in the silver price and that the US Department of Justice looks set to investigate as well.

Before looking at this shocker of an Orwellian development, it’s helpful to provide some context on the CFTC’s track behavior in this area and to show how hypocritical such a development would be. Continue reading “Article: Ignoring years of silver price manipulation, Orwellian CFTC now goes after Reddit Apes”

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Article: Young Koreans are echoing r/WallStreetBets in their war against short sellers

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Young Koreans are echoing r/WallStreetBets in their war against short sellers

Max Kim, Rest of World,  03 March 2021

The Korean Stockholders’ Alliance is located in Yeouido, Seoul’s financial and political district, on the fifth floor of an officetel building mostly occupied by financial companies. Jung Eui-jung, the 62-year-old head of the Alliance and the sole resident of its office, points out the window to a large, bright-yellow bus parked outside on Eunhaengro (“bank street”), so named because it is home to South Korea’s two main state banks. The Alliance is an advocacy group that represents retail investors, with around 41,000 members. Its current mission statement is displayed in block letters on the side of the bus: “I hate short selling!”

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Article: How Regulating GameStop’s ‘Market Manipulation’ Could Harm Crypto

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How Regulating GameStop’s ‘Market Manipulation’ Could Harm Crypto

Benjamin Sauter, Steven Perlstein, William McGovern and David McGill, 02 March 2021

The ongoing roller-coaster ride of GameStop, dogecoin and other so-called meme stocks has led day traders, market makers and exchanges to attack each other with knee-jerk accusations of “market manipulation.” When this happens, the primary winners are government regulators seeking to expand the scope of their authority. Industry cries of market “manipulation” – from all sides – are not only shortsighted. They also risk setting the market on a path towards an enforcement framework that all market participants may come to regret, no matter what side they think they are currently on.

Reddit takes on Wall Street
Since early this year, by sharing tips and organizing on social media platforms such as Reddit and Twitter, individual traders have been able to rally prices of meme stocks to unbelievable heights. First, it was GameStop, AMC and a handful of other targets, with traders sending prices skyward 1,500% or more. Then, traders set their sights beyond the securities markets: dogecoin (DOGE) rose over 800% in 24 hours after a tweet from Elon Musk rallied the masses behind it.

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Investor: Keith Gill

Investor, People

Keith Patrick Gill  (born June 8, 1986) is an American financial analyst and investor known for his posts on the subreddit r/wallstreetbets

His analyses of GameStop stock (and his resulting investment gains) posted on Reddit as DeepFuckingValue (DFV) and on YouTube and Twitter as Roaring Kitty were cited by many as a driving factor in the GameStop short squeeze of January 2021, and as a spark for the subsequent trading frenzy in retail stocks. The rising stock value allowed him to turn a US$53,000 investment into an investment worth close to $50 million, as of January 28, 2021. Continue reading “Investor: Keith Gill”

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Article: SEC Suspends Trading In 15 Companies Due To “Questionable Trading And Social Media Activity”

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SEC Suspends Trading In 15 Companies Due To “Questionable Trading And Social Media Activity”

TYLER DURDEN, 26 February 2021

Two weeks ago we said that the regulatory crackdown against WallStreetBets had begun when the SEC suspended trading in pennystock Spectra Science (SCIE). Well, today we got the clearest confirmation yet that the SEC will do everything in its power to make sure that are no more Melvin Capitals and will seek to put a resolute end to the reddit bull raids when it announced that it “suspended trading in the securities of 15 companies because of questionable trading and social media activity.”

Today’s order states that trading is being suspended because of “questions about recent increased activity and volatility in the trading of these issuers, as well as the influence of certain social media accounts on that trading activity.” In enforcing the suspension, the SEC referred to federal securities laws, according to which “the SEC can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.”
Continue reading “Article: SEC Suspends Trading In 15 Companies Due To “Questionable Trading And Social Media Activity””

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Article: EU Watchdog Wants Zero-Commission Probe After GameStop

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EU Watchdog Wants Zero-Commission Probe After GameStop

Irene Madongo, 24 February 2021

Commission-free trading should be scrutinized following the extreme volatility of stock in GameStop driven by a surge in trading using social media, according to the head of the European Union’s markets regulator.

Steven Maijoor, chairman of the European Securities and Markets Authority, took aim on Tuesday at a move toward allowing investors to trade stocks for free. He told the European Parliament’s economic affairs committee that low-cost or no-cost trading can create less transparency for investors. Continue reading “Article: EU Watchdog Wants Zero-Commission Probe After GameStop”

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