janvier 30, 2021

Reddit veut envoyer des actions AMC, GameStop sur la lune. Voici la suite

Par admin2020

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Des piles de pièces sur un tableau avec des équations mathématiques

Les actions de GameStop et d’AMC ont grimpé ces derniers jours. Voici ce qui se passe.

Sarah Tew / CNET

Les investisseurs de Wall Street ont fait de gros paris que le détaillant de jeux vidéo en difficulté GameStop échouerait. Ils faisaient ces paris depuis longtemps aussi, et ils en étaient tellement sûrs que GameStop est devenu l’une des actions les plus fortement mises contre le marché. Au cours des derniers mois, cependant, de nombreux utilisateurs de Reddit ont acheté des actions, augmentant la valeur de GameStop et sapant les gros paris de Wall Street. Au début, ces commerçants du forum ont acheté parce qu’ils pensaient que la société était mieux lotie que ne le pensaient les sceptiques de Wall Street. Puis, alors que la valeur de GameStop montait en flèche, les mauvais paris de Wall Street ont commencé à coûter des milliards de dollars aux investisseurs.

Maintenant, les utilisateurs de Reddit veulent que le prix augmente encore plus, alors qu’ils mènent une bataille épique contre Wall Street.

À un moment donné, les utilisateurs de Reddit du forum r / WallStreetBets ont fait grimper le stock de plus de 14,300% (vous avez bien lu), bien qu’il ait traversé des fluctuations sauvages. Ils ont étendu leur stratégie à la chaîne de films en difficulté AMC et à la société de technologie BlackBerry. Dans leur sillage, ces acteurs du marché en ligne ont bouleversé Wall Street, créant un drame rempli de mèmes, catastrophes de commerce d’applications et jargon Internet étrange car les grands investisseurs ont perdu des milliards de dollars.

C’est une histoire folle, complétée par les camées du PDG de Tesla, Elon Musk, et du commentateur financier de CNBC et ancien gestionnaire de fonds spéculatifs Jim Cramer. Il y a même Michael Burry, l’un des sujets du livre et du film Le grand court, qui se trouve être un investisseur de premier plan dans GameStop.

Même la Silicon Valley a trouvé un moyen de se retrouver au milieu de ce désordre. C’est sauvage.


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Despite the move being characterized as « insane » and a « Ponzi scheme, » GameStop’s stock has become the theater for a war between Wall Street and internet traders. Nearly everyone nearly all of them expecting it to fail. The questions are when, and who will be on the losing end when it does.

« We’re seeing a phenomenon that I have never seen, » Jim Cramer, a Wall Street commentator on CNBC and a former hedge fund manager, said during a segment as GameStock’s stock began rocketing up. And GameStop could be just the start. « It’s insane. »

It all started last week, when posters on the Reddit stock trading chat community r/WallStreetBets pushed up shares in the struggling game retailer. With much of Wall Street betting against GameStop’s success, r/WallStreetBets investors believed they could force a market rally by creating demand where there had been little before.

As a result, GameStop stock jumped more than 822%, from $17.25 per share at the beginning of the year to a high of $159.18 on Monday. Then it dropped by nearly half, only to rise back up to $147.98 on Tuesday. And then Musk tweeted about it to his 43 million followers (using that weird internet vocabulary, of course), and the price jumped 40% in after-hours trading. On Wednesday, it closed at $347.51 per share, before dropping again in after-hours trading.

On Thursday, it jumped even higher, to $483 per share, before halving again. Amid all the chaos, the New York Stock Exchange temporarily halted GameStop share trading more than a dozen times before midday Thursday. It ended the normal trading day down 44% to $193.60, only to jump back 

The Reddit community has also turned its eyes on BlackBerry, attempting to pull the same trick. So far, they’ve pushed shares up more than double from $6.58 per share, where they started at the beginning of the year. On Tuesday, the stock closed at $18.92. On Wednesday, it closed regular trading at $25.10, though it’s fallen since then to $14.65.

There’s also AMC. Reddit targeted that one, spawning the hashtag #SaveAMC on Twitter too. Its stock jumped from $2 per share last week to close trading at $19.90 on Wednesday. It too fell in after-hours trades, and after jumping on Thursday, fell again to close at $8.63.

App-based traders Robinhood, TD Ameritrade and WeBull responded to the fluctuations by restricting trades of GameStop, AMC and other fast-moving stocks on their services.

Robinhood drew particular ire, leading US Reps. Rashida Tlaib and Alexandria Ocasio-Cortez, as well as Sen. Ted Cruz, to criticize its decision. Some people had already raised concerns about Robinhood before, saying it « gamified » stock trading. Now it’s being accused of outright market manipulation, including through at least one class action lawsuit filed already. Robinhood, for its part, said Friday that market rules effectively forced it to put those restrictions in place.

It’s a lot to take in. So, here’s what you really need to know about GameStop, AMC and Wall Street.

How’d this happen?

gamestop-store610x458.jpg

GameStop is one of the largest video game retailers in the world, but it’s struggled to remain relevant in the age of online sales.

Effectively, the r/WallStreetBets crowd realized Wall Street made a huge mistake. People known as short sellers who were betting GameStop stock would fall had been too aggressive. 

The r/WallStreetBets crowd understood that if they could create artificial demand for GameStop shares with their own money, they could force Wall Street to recalibrate its bets, pushing prices even higher. And some investors who couldn’t even back up their bets against GameStop, would have to pay even more. 

As of Wednesday, there were 3.8 million members of the r/WallStreetBets community,  though it’s nearly impossible to determine how many people are involved in the GameStop, AMC and BlackBerry schemes.

What we do know is that all this activity appears to have created a « short squeeze, » where the short sellers betting against GameStop are being forced to buy more GameStop stock to cover their losses. That pushed the price up even more, which forces more short sellers to cover their losses, which pushes the price up even more. Some of the Reddit crowd believe that GameStop stock could reach into the thousands of dollars just because of this mechanism.

And that’s why we’re suddenly seeing GameStop’s value jump.

See also: GameStop’s stock spike fueled by slang from Reddit’s r/WallStreetBets community. Here’s what it means

How does this short selling work?

When people buy a stock normally, they’re betting it’ll rise or share enough profits that they’ll make more money than they put in.

Short sellers, or « shorts, » do the opposite. Shorts trade with borrowed shares and sell them, with hopes they can make money if the stock falls in the future.

Imagine Ian Corp. is a public company, and its shares are worth $10. A « short » would borrow shares of Ian Corp. and sell them for $10. Their bet is that Ian Corp. stock will actually drop below that — maybe to $4. If it does, then, they can buy the shares at $4 and pocket the other $6.

If Ian Corp. stock jumps to $25, then the lender who made this bet possible may push the short to cover their bet. That would mean the short effectively has to buy the shares at the new, higher price.

When a short is right, betting against a company, they can make a lot of money. But if they’re wrong, they can lose a lot more money too.

There are other options and tools to bet against a company’s future as well.

Tracking GameStop's stock price mid-January

GameStop stock from Jan. 19 to Jan. 25.


Google Finance

How much money did the GameStop shorts lose?

The losses appear to be tremendous. As of Wednesday, shorts seemed to have lost $5 billion betting against GameStop this year, according to Investopedia. About $1.6 billion, or about half, of those losses happened on Friday when the stock jumped 51%.

It’s also worth noting that GameStop began the year as one of the most shorted companies on the market.

That seems like a lot of money

It is, but what’s perhaps an even bigger indication of how dramatic these moves were, GameStop share sales were halted during Monday’s trading because they were moving too fast.

See also: How to choose a credit card

These wild swings won’t continue forever, will they?

Part of what’s driven this behavior is the popularity of retail investing, or when traders who aren’t Wall Street professionals buy and sell stocks. Stock trading apps, often with no fees, have made it easy for people to jump into the market. And social media has helped people to rally together, egging one another on to buy more and more of a stock.

« GameStop’s rally is one in a series of eye-catching market moves to stir concerns among fund managers, some of whom say trading by individual investors is pushing stock prices out of whack with fundamentals, » The Wall Street Journal wrote Monday.

How’s Wall Street responding?

Big name trading apps like Robinhood, ETrade and others have reportedly struggled to remain online amid all the hysteria. TD Ameritrade on Wednesday acted to restrict the sudden spikes in demand, « out of an abundance of caution amid unprecedented market conditions. »

Robinhood has also come under particular scrutiny for appearing to severely restrict trades of some stocks while the market was wildly fluctuating Thursday. Politicians on both sides of the aisle in the US have called for an investigation into the app maker. Meanwhile, many angry Redditors say they’ll stop using Robinhood. Some have even threatened to join a class action lawsuit.

Nasdaq said it will halt trading on a stock if it finds a link to unusual activity on social media. The company said it sees its role as a « self-regulatory organization » is to make sure its markets act in a « legitimate » way. « Regulators kind of have to catch up with the technology that’s now available, » Nasdaq CEO Adena Friedman told CNBC on Wednesday. 

Throughout the past week, the markets have temporarily halted trades of GameStop and AMC stocks in particular because of the wide price swings and heavy volume.

I heard people are particularly angry at Robinhood. Why?

Of the stock trading apps, Robinhood appeared to be the most aggressive in shutting down purchases of highly volatile stocks like GameStop and AMC. The company hasn’t given clear reasons, other than vaguely saying it’s working in the interest of users. But the US government may not agree.

On Friday, the Securities and Exchange Commission said it’s « closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days. » 

The statement didn’t mention Robinhood by name, but the commission said it would « closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities. » 

Robinhood declined to comment about the SEC statement. The White House referred questions about GameStop and brokerage firms to the Treasury Department, which houses the SEC.

What does Robinhood have to say?

On Friday, the company published a blog post explaining that the company it works with to help users trade stocks was what had set off all the drama. That company, a clearinghouse that helps facilitate the transaction of stocks and cash between buyers and sellers, requires Robinhood and other trading companies it works with to have a specific amount of money in deposits each day to cover their customer’s stock trades. That amount changes each day, based in part on market volatility.

Robinhood said that last week it was told it must increase its deposits tenfold. « That’s what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on, » the company said. The requirements were so large, it said, that it had to restrict trades in order to meet its requirements. 

« It was not because we wanted to stop people from buying these stocks, » the company added. « This is a dynamic, volatile market, and we have and may continue to take action to make sure we meet our requirements as a broker so we can continue to serve our customers for the long term. »

Has Robinhood gotten in trouble with the SEC before?

It has. A little over a month ago, on Dec. 17, the SEC charged Robinhood with « repeated misstatements that failed to disclose the firm’s receipt of payments from trading firms for routing customer order to them. » What that means in plain English is that Robinhood didn’t tell users that their share trades might be accessible by people competing against them in the market.

Robinhood made its name by offering stock trades without a standard commission that people often payed at other firms. The SEC said that between 2015 and 2018, Robinhood made misleading statements and omissions, including « in FAQ pages on its website, about its largest revenue source when describing how it made money – namely, payments from trading firms in exchange for Robinhood sending its customer orders to those firms for execution, also known as ‘payment for order flow.' »

The SEC estimated that Robinhood’s approach deprived users of $34.1 million, even after taking into account the savings from not paying a commission.

Robinhood agreed to pay $65 million to settle the charges « without admitting or denying » the SEC’s findings.

« There are many new companies seeking to harness the power of technology to provide alternative ways for people to invest their money, » Erin E. Schneider, director of the SEC’s San Francisco regional office, said at the time.  « But innovation does not negate responsibility under the federal securities laws. »

What do the companies think of all this?

GameStop didn’t respond to a request for comment. BlackBerry executives told MarketWatch it was « not aware » of any reason for the recent trading activity. BlackBerry did reach a settlement with Facebook earlier this month over a patent fight, though the terms were not disclosed.

Why are the Redditors doing this?

There’s the seeming easy money aspect, which is compelling in and of itself if you’re that comfortable with risk. But some of them are also framing this as a crusade against Wall Street. « We’re in a war, » one Redditor posted Wednesday. « A war for the redistribution of wealth. »

You promised me Elon Musk, how’s he involved?

Aside from being a prolific Twitter user, Musk has also recently learned he can drive people to various companies’ stocks. He tweeted about how much he enjoyed buying something for his dog off Etsy, and the stock jumped. Now he’s tweeted about GameStop, stirring up more frenzy.

Any other people’s opinions I should know about?

If you’re a fan of Comedy Central’s The Daily Show, Jon Stewart posted his first ever tweet in support of the Reddit crowd on Thursday. Among other things, he also said we clearly hadn’t learned from the financial crisis.

I went to r/WallStreetBets and saw this post of someone’s brokerage account worth tens of millions of dollars in GameStop stock.

That’s Keith Gill, or Roaring Kitty on YouTube, one of the first people to kick off this rally. He spoke to The Wall Street Journal, telling his story about how he never expected this to happen. 

He posts a screenshot of his share values from his ETrade brokerage every trading day, in what he calls a YOLO (« You only live once ») update. Many r/WallStreetBets members cite his holding onto shares despite stock fluctuations as inspiration for them to hold as well. « REMEMBER: If [he] peut tenir même après une baisse de 130%, tout comme VOUS », a déclaré un utilisateur de Reddit en tant que le stock a commencé à fluctuer.

« Je pensais que ce commerce réussirait », a déclaré Gill au WSJ, « mais je ne m’attendais pas à ce qui s’est passé la semaine dernière. »

Cela semble fou

Il est. Et le simple fait de le regarder suffit à faire tourner la tête. Par exemple, mercredi soir, la populaire application de chat Discord a banni la communauté r / WallStreetBets de son service pour violation de ses règles contre les discours de haine et la glorification de la violence. Apparemment, certains des éléments les plus méchants de la communauté avaient enfreint à plusieurs reprises les règles de Discord.

À peu près à la même époque, le groupe en charge de la communauté r / WallStreetBets Reddit a verrouillé toute autre personne qui pourrait être intéressée à rejoindre, ce qui rend tout cela privé.

Cela a semblé effrayer les investisseurs, qui ont soudainement fait plonger les actions de GameStop et d’AMC de plus de 30% chacune dans les transactions après les heures de bureau.

Un peu plus d’une heure plus tard, la communauté Reddit était à nouveau accessible au public, les habitants avaient créé un nouveau groupe de discussion Discord et les actions de GameStop et d’AMC se remettaient de leur soudaine effondrement. Si vous aviez posé votre téléphone pour regarder un film avant qu’il ne se produise, vous ne l’auriez peut-être jamais remarqué au moment où cela a été fait.

Sauf que vous avez peut-être vu Elon Musk tweeté sur le fait que Discord n’était plus cool (Discord a finalement annulé sa décision.)

OK, et qu’en est-il du gars du Big Short?

Michael Burry est lui-même un sujet intéressant. Il est devenu célèbre pour ses paris contre le marché immobilier avant le début de la grande récession aux alentours de 2007 et 2008. Il avait investi dans GameStop, mais il a également déclaré qu’il pensait que tout ce comportement était «contre nature, insensé et dangereux».

Bien sûr, certains membres de Reddit disent qu’ils voient cette bataille sur GameStop comme leur moment Michael Burry, ce qui le rend d’autant plus intéressant.

Dois-je essayer d’entrer dans la frénésie?

Il est toujours judicieux de consulter un professionnel de la finance avant de prendre des décisions d’investissement.

Correction le 25 janvier à 17h52 PT: Correction de l’explication de la vente à découvert pour clarifier le fonctionnement du processus et dire qu’il existe différentes façons de parier contre la hausse du cours des actions d’une entreprise.



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