And then there’s Wall Street Bets, a very popular Reddit forum that focuses on options trading. This is a kind of collective spirit in which individual investors loosely adjust their collective spirit to the targets that are most likely to amplify price spikes. In the last few weeks, posts have begun to appear on forums, highlighting the lack of large numbers of GameStop shares and explicitly encouraging others to buy shares and raise prices.
A commentator by Gardion wrote on January 19th, “My brothers, rallying troops for the war may be over soon.” “You control power. GME does not go to the moon, [expletive] Observable universe. “
Such explicit demands on social media for investors to coordinate their behavior have hit many observers as avoiding the lines of market manipulation. “We are actively monitoring ongoing market volatility,” the SEC said in a statement on Wednesday.
According to lawyers, cracking down on platforms like Wall Street Bet is very difficult and it is not clear if there was a securities law breach.
Andrew Calamari, Securities Attorney at Finn, Dixon & Herling, said: Former director of SEC’s New York office
However, it is effective.
Melvin Capital, a reputable hedge fund run by former top trader Gabe Plotkin of hedge fund giant Stephen A. Cohen, elicited the wrath of Wall Street Bet after disclosing it in a filing filed with GameStop. (Put is an option that makes a profit if the share of the stock goes down.)
Fund bets backfired — The Wall Street Journal reported a 30% drop in the first few weeks of January alone — and Melvin summed up two big funds, Citadel and Cohen’s Point 72, plunging on Monday. $ 2.75 billion to the fund said it had injected. A Melvin spokesman said the fund closed its position at GameStop.
As Reddit investors challenge WallSt, GameStop’s share price will skyrocket.
Source link As Reddit investors challenge WallSt, GameStop’s share price will skyrocket.