After a surge of 134%, it fuse 17 times! U.S. retail investors hold group against bears and Wall Street staged an "epic" long-short battle
On the 28th, a tragic scene occurred in the US stock market.
One of the most watched stocks on Wall Street-Game Station, has a closing price of US$193.6, plummeting more than 44%!
Game station fuse 17 times retail investors were encircled and suppressed
The game station broke 17 times in the intraday market, which once plummeted to 67.70%, but it also soared by nearly 40% at one time, and this was just a day's transaction.
The day before, the game station stock soared 134.84%.
If you take the time a little longer, in less than a month since 2021, this stock has skyrocketed by 2500%.
This is called an "epic" long-short battle by market analysts.
U.S. retail investors hold a group battle against Wall Street bears
At the beginning of January this year, Game Station had a new partner and may begin to vigorously develop its online business in the future. Many people thought this was good news, so they began to buy their stock, and the stock price rose rapidly.
But such stocks are precisely the favorite short-selling targets of Wall Street short companies in the United States. Many short-selling institutions and hedge funds believe that their subsequent stock prices are bound to fall, so they began to short the game station.
On January 19, the well-known Wall Street short-selling company Citron announced that the share price of Game Station would soon fall from $40 to $20, and mocked that "it is fools who buy now."
Some retail investors are very dissatisfied with the behavior of "cutting leeks" by short-selling institutions. They launched an action through an interest community forum called "Red Di", calling on retail investors to unite and a confrontation between retail investors and large Wall Street institutional investors Start here.
"The Wolf of Wall Street" author Jordan Belfort: We want to demonstrate the power of the Internet and forums like "Red Di".
Many investors chanted the slogan "There is only one life" in the forum and bought the shares of Game Station frantically.
In this situation, stock prices continue to skyrocket.
On the 22nd, Left, the owner of Citron, was forced to "confess" and issued a statement saying that he was attacked by "Internet mobs" and stopped commenting on the game station.
Subsequently, another hedge fund, Melvin Capital, took over the short-selling baton after receiving capital injection.
However, on January 26, Tesla boss Musk, who had suffered from short-selling institutions, intervened in this game. He supported the game station on the social platform and further ignited the passion of retail investors.
The share price of Game Station immediately rose at an eye-popping rate. It exceeded $347 at the close on the 27th, an increase of nearly 8 times in a week.
According to data from a financial analysis company, as of that day, institutions shorting the game station had lost more than $5 billion.
"The Wolf of Wall Street" author Jordan Belfort: This is the source of anger, because Wall Street deprives the United States (property) all the time, and now these "little people" finally have a rare opportunity to intervene and be taken away by big companies.
The trading platform severely recruited retail investors and was broken up
However, by the 28th, things changed a little.
Because it does not charge users for transaction fees, Robin Hood, the US securities trading platform, has become one of the most important retail gathering places in the United States in the past few years.
However, this brokerage platform began to implement restrictive measures on the 28th to prevent users of its applications from buying stocks targeted by retail investors such as Game Station and only allowing them to be sold, claiming that this is to protect everyone.
Robin Hood CEO Vlad Teneff: We really have never experienced such a moment. In order to protect the company and our customers, we must limit buying.
Affected by the inability of a large number of retail investors to trade, the game station fell all the way after opening up 37% on the 28th. At most, it fell by more than 60%, and finally closed by more than 44% on the day.
The platform restricts retail transactions and provokes angrily lawmakers to request an investigation
This day is called an ugly day on Wall Street.
Retail investors are deprived of the right to buy, but Wall Street institutions can still go short without any restrictions.
This makes ordinary investors extremely angry. This game between US retail investors and institutional investors has attracted attention from all aspects of the United States.
Cortez, a Democratic member of the House of Representatives Financial Services Committee, said that Robin Hood's move was "completely unacceptable."
She condemned Wall Street Capital and said, “Those Wall Street people who have long regarded our economy as a casino, this time complained that netizens treat the market as a casino. It’s really interesting.” She finally added: “Add taxes to the rich”, and Call for a corresponding hearing.
The incoming Democratic Senator Brown said on the 28th that the Senate Banking Committee will hold a hearing on "the current state of the stock market."
Brown said, "American workers know that the Wall Street system has collapsed for many years, and they have been paying for it." "The SEC and Congress should make the economy work for everyone, not just Wall Street."
After Robin Hood took the above restrictions, angry retail investors regarded this institution as an "accomplice" to "assisting the shorts."
Under Robin Hood’s social accounts, a large number of investors bombarded the trading platform’s decision. It is reported that retail investors have initiated a class action lawsuit against Robin Hood Securities.
On the 28th, a group of angry protesters gathered outside the headquarters of Robin Hood to protest their actions.
(U.S.) Protester: Hey!
Uninstall Robin Hood, remove it from your phone.
(U.S.) Protesters: Those big companies, they are trying to manipulate the market through the Robin Hood system. This is crazy. They close the transaction. You can no longer buy stocks, you can only sell them.
They want to make people scared so that they can go short. We are here to protest because it is too much.
When many retail investors rush to buy the stocks of Game Station, they don't care whether the price of the stock deviates from the fundamentals. They just want to defeat the short positions that represent big capital and vent their emotions.
There are still many people who use this opportunity to exploit loopholes and try to achieve "financial freedom."
Wedbush Securities Company Manager Pachet: I think this is crazy. This is an unprecedented thing. It is a pyramid scheme.
But even if this is a farce, it is too ugly to end the farce by restricting transactions and manipulating the market.
Democratic Senator Warren said that this incident proves that the US Securities and Exchange Commission needs to strengthen supervision.
Democratic Senator Warren: Now, the stock market has become a casino. People who manipulate the stock market enter the market and make the stock market fluctuate to make a profit. Now those big capitals are starting to speak out because they are no longer the only ones who can manipulate the stock market to make money. People.
But when they make money, there are always people who are losing money, and those people can’t afford it. So we need the Securities and Exchange Commission to formulate regulations to restrict market manipulation and implement them firmly.
U.S. stocks long and short wars draw attention from the SEC
The recent long-short battle in US stocks has attracted the attention of regulators.
On the 29th, the US Securities and Exchange Commission issued a statement stating that the Commission is closely monitoring and evaluating the extreme fluctuations in the trading prices of certain stocks in the past few days, and warned against illegal "manipulated trading activities."
The SEC stated that it will continue to protect investors and maintain a fair, orderly and efficient market.
The statement said that if there is evidence that there is a violation or manipulation of transactions prohibited by the Federal Securities Act, the SEC will take action to protect retail investors.
On the 29th, the share price of Game Station closed up nearly 70%.
Before the market opened, Robin Hood, the US securities trading platform, stated that it allowed limited purchases of Game Station stocks and other serious short-selling stocks.
Wall Street short company Citron also stated on social media on the 29th that it would stop short research and focus on long opportunities.