Jaydyn Carr, a ten-year-old who paid out GameStop, and his mother tell their story of acquiring and selling his GameStop share amid the short press.
The U.S. Securities and Exchange Commission will have a hard time proving the recent rising share price of GameStop Corp and others as it can prove the result of market manipulation.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| GME | GAMESTOP CORP | 325.00 | +131.40 | + 67.87% |
“According to one sentence, clever manipulation is by sinister manipulators,” Professor John Coffee at Columbia Law Professor told FOX Business.
GameStop shares rose Friday, rising 1,545% since Jan. 12, after a group of investors banded together to squeeze short sellers who increased their stake in the video game trader to about 150% of the outstanding shares.
Other names with major short circuits, including AMC Entertainment Holdings, Bed Bath & Beyond Inc. and BlackBerry Ltd., also made excessive profits due to similar short pressures.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| AMC | AMC ENTERTAINMENT HOLDINGS INC | 13.26 | +4.63 | + 53.65% |
| BBBY | BED BATH & BEYOND INC. | 35.33 | +1.69 | + 5.02% |
| BB | BLACKBERRY LIMITED | 14.10 | -0.55 | -3,75% |
The idea of launching a counterattack against the short sellers has been linked to the WallStreetBets message board on the discussion site Reddit.
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“The other view is that Wall Street is flooded and overtaken by thousands of retail investors who marched on Wall Street like French farmers during the French Revolution and carried commuters,” he added. “They are inexperienced. They know nothing about investing, but they believe in momentum and they are going to keep chasing something and think it is going to go on forever. ”
“The SEC said Friday it is monitoring developments and will take action to protect retail investors when facts show offensive or manipulative trading activities prohibited by federal security laws.”
The SEC said Friday it is monitoring developments and will “act to protect retail investors when facts show offensive or manipulative trading activities prohibited by federal security laws.”
According to Coffee, it is very difficult to prove manipulation.
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“The problem is to distinguish the true believers who have committed no crime from people who are simply trying to pressure others to buy, to push the stock up because they want to print the shorts,” he said.
To do this, regulators need to find a technique or tactic used by those who wanted to manipulate the market, such as sending emails to thousands of investors.
“There are many, many of the true believers,” Coffee said.
Retail investments have become popular as more Americans have found time to monitor their investments while working from home during the COVID-19 pandemic.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| SCHW | CHARLES SCHWAB | 51.54 | -2.20 | -4.09% |
The environment has led to a 50% increase in the number of households trading, according to Charles Schwab, who also owns TD Ameritrade. Many of them have had little investment experience, and in the long run it could be those who suffer the most from the effects of what happens in GameStop and other stocks.
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“Placing handrails around this kind of other legal activity will hurt the flow of information to the market in the long run,” wrote Jennifer Schulp, director of financial regulation studies at the Cato Institute, a libertarian leaning think tank. “Increased participation in retail in the market should be welcomed as an opportunity for people to increase long-term wealth, especially if they are aware of the risks and benefits of investing.”