A video game retailer GameStop store in New York, USA on the 28th (local time). /AP Newsis
In the United States, the situation that the’Game Stop Incident’, which became a hot topic in the confrontation between the ant (individual investor) corps and the short selling forces, also affected the domestic stock market environment was caught. A large-scale sell order has been placed at some large domestic stocks such as Samsung Electronics and SK Hynix through the counters of foreign securities companies. Global hedge funds, which are in crisis of cash shortages, were blamed as the main culprit. Analysis shows that hedge funds, feeling anxious about volatility, have started to sell domestic stocks by reducing their share of stocks.
◆Consecutive sell order for top market stocks
According to the Korea Exchange on the 1st, a net selling order of 2.67 million shares of Samsung Electronics was placed at the Macquarie Securities window on the 29th of the previous trading day. Among them, 1.82 million stocks, which are 68% of them, were placed on sale at 3:31 pm after the market ended. On this day, the stock price of Samsung Electronics closed at 82,000 won, down 2.03% (1700 won) from the previous day. It means that stocks worth 144.9 billion won were sold at Macquarie Securities.
It’s not just Samsung Electronics. Large-scale sell orders from top-ranked stocks in the market capitalization of 66,000 shares of SK Hynix, 42,000 shares of LG Chem, 690,000 shares of Samsung Electronics, and 22,000 shares of Naver were in succession.
Foreigners recorded net sales of 1.432.8 billion won in the KOSPI market that day, and sold 5.6 trillion won worth of stocks in the last four days. However, trading at the counter of a foreign securities company differs from the foreign trading trend announced after the market closes.
◆Crisis Global Hedge Fund
The general view is that such a massive sell-off should be viewed as the aftermath of the’short sell war’ in the US stock market.
The direct fuse of the war was the video game retail chain’GameStop’. Gamestop’s stock price started to jump on the 13th, when news that Ryan Cohen, founder and activist investor of Chewy, a pet supplies company, joined as the board of directors. As a result, hedge funds went on short selling, saying that they had risen excessively, which led to a gathering of individual investors who were usually dissatisfied with the forces of short selling.
The angry individual aggressively bought the stock as well as the stock call option. With the enormous buying trend, GameStop’s stock price rose 700% in less than two weeks, and soared to $325 based on the closing price on the 29th, recording an amazing 1625.05% this year.
Hedge funds are in a liquidity crisis and an emergency situation. Melvin Capital invested in the short selling of GameStop and, after a huge loss, transfused nearly $3 billion in emergency funds from Point 72 and Citadel. Point 72, which manages 19 billion dollars (about 21.2 trillion won) of funds, also lost nearly 15% this year due to the concentrated purchase of GameStop stocks. The ants who have achieved victory are expanding their gamestop to BlackBerry, AMC Entertainment, and Bed Bath & Beyond.
◆Hedge funds to sell domestic stocks for the time being
Experts believe that a hedge fund, which faced a cash shortage situation, poured out domestic stocks as well. When individuals with a collective character began to intensively buy short-selling stocks, hedge funds, which could not afford to handle their supply and demand, adjusted their asset weight and sold domestic stocks as well. Some analysts say that hedge funds can enter domestic stocks by reducing the proportion of overseas stocks in the future.
Seo Sang-young, a researcher at Kiwoom Securities, said, “It is estimated that the investment funds that have flowed rapidly since November of last year are foreign funds of hedge funds.” He said, “In fact, global hedge funds are rapidly reducing their exposure to stocks in response to the recent rapid increase in volatility,” he said. I loved it.
Byun Joon-ho, a researcher at Heungkuk Securities, also explained, “A short selling company suffered a large loss, resulting in a shortage of funds. The selling tax for securing funds may continue.”
Some analysts say that hedge funds can repurchase domestic stocks by adjusting the weight of their assets. An official from the IB industry predicted, “I felt an unprecedented sense of crisis that hedge funds could also be ruined by individual attacks.”