U.S. SEC scolds investors as GameStop jumps, short-selling war resumes

[turbinetree]

U.S. LEGAL NEWS
JANUARY 28, 2021 4:31 AM UPDATED 9 MINUTES AGO

By Sagarika Jaisinghani, Medha Singh

7 MIN READ

GameStop shares jumped, awarding retail investors the advantage in the latest round of their week-long slugfest against major financial institutions that had shorted the video game retailer.

The so-called “Reddit rally” has inflated stock prices for GameStop and other previously beaten-down companies that individual investors championed on social media forums.

GameStop surged 83% on Friday after brokers including Robinhood eased some restrictions on trading. On Thursday, GameStop shares slid following the trading halts from Robinhood and other trading apps, which drew outrage from politicians and calls for action from regulators.

Reporting by Sagarika Jaisinghani, Medha Singh, Sruthi Shankar, Munsif Vengatill, Devik Jain and Anirban Sen in Bengaluru, Fergal Smith in Toronto, Anna Irrera, Saqib Iqbal Ahmed, Lewis Krauskopf, Chris Prentice and April Joyner in New York, Susan Heavey in Washington, Sujata Rao-Coverley, Tom Wilson and Thyagaraju Adinarayan in London; Writing by Patrick Graham and Nick Zieminski; Editing by Saumyadeb Chakrabarty and David Gregorio

https://www.reuters.com/article/us-retail-trading/u-s-sec-scolds-investors-as-gamestop-jumps-short-selling-war-resumes-idUSKBN29X12T

[Bernardo de La Paz]

1. There will be many reports after the stock collapses of "retail investors" hurt by this

It's a mania. People buying at these insane prices will have to sell them at or above to recoup their investment. Many won't and will hold on far too long.

Ordinary small investors ("retail investors" ) are being sucked in and suckered in.

I think the core of the people pumping it up on Reddit will quietly sell for a profit while most others take losses.

[michael811]

3. this isn't a mania its a move to exploit market manipulation and the laziness of wall street

This is similar to what some people did to get rich when they shorted the housing market before it collapsed. They saw companies were lazy and overleveraged and took advantage. Hedge funds had shorted a 140 percent of 'Gamestop stock. They have to buy it back. They have no other choice. They were playing games and they got caught.

[Bernardo de La Paz]

7. It's a move to exploit market manipulation and the naivety of "retail investors"

This isn't investing. It's speculation on the part of the Reddit hordes.

The people buying GameStop are playing games. They are going to get caught. They won't sell in time and then suddenly there will a rush for the exits.

Everyone who bought the stock at ridiculously inflated prices will have to sell it before it passes their purchase price heading down. Otherwise they will lose money.

The market manipulation is the group pushing it on Reddit. Just because they are "retail investors" doesn't mean that they aren't manipulators.

People have been charged, tried, and convicted before for online pump-and-dump manipulation.

[tirebiter]

2. Deadwood stocks

There’s gold in them thar hills.

[W_HAMILTON]

4. Seems like a shitty headline based on the actual quoted comments from the SEC.

The SEC, traditionally cautious with public pronouncements, issued a rare joint statement from its acting chair and commissioners. It said it was working closely with other regulators and stock exchanges “to protect investors and to identify and pursue potential wrongdoing” and would “closely review actions ... that may disadvantage investors” or hinder their ability to trade stocks.

That was the quote from the article. That doesn't seem like the SEC is "scolding investors." Oh well, I guess be ready for the usual Twitter folks to get outraged based on a poor headline.

EDIT: I went ahead and found the actual statement -- it's very short and much more friendly to so-called "retail investors" rather than "scolding" them like the poor headline suggested:

The Commission is closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days. Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence.

As always, the Commission will work to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate capital formation. The Commission is working closely with our regulatory partners, both across the government and at FINRA and other self-regulatory organizations, including the stock exchanges, to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing. The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.

In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.

The Commission will continue our work on behalf of investors and the markets. In this regard, we hope to facilitate a robust public dialogue among market participants and investors on the structure and operation of our securities markets. Members of the public can submit tips or complaints through the Commission’s website using this online form. Members of the public with questions should contact the Commission’s Office of Investor Education and Advocacy at 1-800-732-0330, ask a question using this online form, or email us at [e-mail].

Taken from: https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29

[Budi]

8. Thank you

[Bernardo de La Paz]

11. Perhaps it is scolding RobinHood and that is why RH reversed course today

SEC will "closely review actions" that hinder investors ability to trade stocks.

[W_HAMILTON]

12. But Robinhood is a brokerage, not an investor.

[Bernardo de La Paz]

13. We know that. But RH blocked trading in GameStop in its app. Hence the point I highlighted

As you wrote, the headline is a shitty characterization of what actually was said. And I quoted your own words. Perhaps it was an oversight to not more explicitly mark them as quoting your characterization of what the SEC said.

Yesterday RobinHood blocked trading for "retail investors".

Today, SEC lets it be known that they are concerned about impediments to retail investors trading.

Today, RobinHood reversed course and allowed trading on its app.

Not coincidental.

[0rganism]

5. transfer of wealth from hedge funds to day traders

While I generally approve of soaking the vulture capitalists and have had many a laugh at their expense as they are hoisted on their own petards, there will be unpleasant consequences for those whose pensions and stock portfolios are laden with hedge fund shares. Only some were personally responsible, but all stakeholders will feel the pinch.

We were fools to back our retirements with the earnings of casino houses.

[safeinOhio]

6. Time to bail out some rich people.

Save the Billionaires.

[pansypoo53219]

10. pure casino shit.