China’s Puto Holdings and Upfintech Holdings, which are listed on the US NASDAQ, have joined the measure to restrict trade for some stocks. It restricted some transactions in stocks with soaring stock prices, such as’Game Stop’, which became a confrontation between general investors and short selling forces, as well as’AMC Entertainment Holdings’. This is interpreted as a willingness to join US securities companies including Robin Hood to impose restrictions on trading of related stocks.
Concerns about market turmoil… “Sell only”
According to the investment banking (IB) industry on the 29th, Puto Holdings and Upfintech Holdings implemented a partial transaction restriction on some stocks that surged, including Game Stop. The two companies are online brokerage firms that help Chinese investors trade overseas stocks.
(Photo = Puto Holdings Facebook Capture)
On this day, Puto Holdings announced that it is possible to sell its existing stocks instead of banning the purchase of related stocks. Puto Holdings is an online securities company owned by Tencent at 38%, and was successfully listed on the NASDAQ in 2019. Uppintech Holdings, which Xiaomi owns 14.1%, also said on the same day, “We are restricting transactions due to regulatory compliance requirements.”
Currently, U.S. securities companies are implementing a restriction policy as the stock price of related stocks such as Gamestop has risen significantly according to orders from individual investors spread through online communities such as Reddit. In the case of GameStop, it surged by more than 400% for three days after the migration, drawing attention from all over the world.
Individual investors who rebelled against the public short selling of some hedge funds gathered around Reddit’s’Wall Street Betz’ discussion room, and then began to act as a group. Due to the unity of individual investors, some hedge funds continued to struggle, such as giving up short-selling positions despite large losses.
However, the situation reversed on that day, saying that Robin Hood and other US securities companies were restricting trading of related stocks due to excessive volatility. Based on the closing price, GameStop finished trading at $193.60 (about 210,400 won), and turned to a decline for the first time in six trading days. This is a 44.3% drop from the previous trading day.
(Photo = Gamestop Facebook capture)
The so-called’Seohak Ants’ Rebellion’ has entered a new phase with the action of restricting transactions. This is because individual investors around the world, including the United States, protested against the restrictions on trade restrictions at some securities companies and demanded that the restrictions be lifted. In the U.S., public opinion that a lawsuit against Robin Hood will be immortalized is intensifying, and individual investors are eager.
Ease trading restrictions, recover over $300 after hours
Robin Hood also said, “We will allow limited purchase of the securities from the 29th (local time) on the 29th (local time), and we can continue to monitor the situation and make adjustments as needed.” On the day, Vlad Tenef, CEO Robin Hood, announced plans to partially ease trading restrictions, emphasizing that it was not adjusted by hedge funds or some short selling forces. When news of the easing of some trading restrictions was announced, Gamestop stocks have recovered to the $300 level through after-hours trading.
Meanwhile, securities companies around the world, including Korea, are not implementing restrictions on trading on related stocks including Gamestop. Major domestic securities companies such as Korea Investment & Securities, NH Investment & Securities, and Mirae Asset Daewoo announced that they have no plans to take measures to restrict transactions. However, Shinhan Investment Corp. blocked trading of game stop stocks at the dawn of the 29th, Korean time. It is known that this was caused by the circumstances of the local securities company.
‘Webull’, which is being used as a stock trading app in the United States, also revealed that there are no changes to Gamestop and AMC. Weibull is a company founded by China’s Wang Anchuan, who is from Alibaba, with the investment of Xiaomi in 2017.