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“Gme. we are going to moon this Friday.” (Gamestop. Let’s go to the moon this Friday)
On the 27th, a netizen responded to a question posted on Reddit on social media (SNS) asking’Which of AMC Entertainment stock or Gamestop stock should I buy?’
Recently, the’short sale war’ between individuals and institutions over gamestop stocks is heating up the US stock market. It was found that Seohak ants also participated here.
According to the Securities Information Portal of the Korea Securities Depository on the 28th, from the 18th to the previous day, domestic investors paid 59.2 million dollars (about 66.7 billion won) worth of GameStop shares.
The purchase amount was $31.4 million (35 billion won), and the selling amount was 2852 million dollars (31.7 billion won), and the net purchase amount was 2.88 million dollars (3.2 billion won).
Gamestop stocks have emerged as a battleground between individual investors seeking to raise their stock prices on the US stock market and institutional investors who sell short.
GameStop is one of the companies hit by the novel coronavirus (Corona 19) as a video game distribution store chain. Stocks traded for 4 to 5 dollars per share until the first half of last year.
Stocks that had been sideways gained attention at the end of August last year when Ryan Cohen, founder of Chewy, a companion animal supplies distributor, acquired more than 10% of GameStop’s stock.
In response to this news, the stock price rose as individual investors also bought GameStop. As Chewy is leading the industry in the online pet product market, the expectation that the retail store-oriented GameStop will succeed in improving the constitution was the basis.
Wall Street institutional investors, on the other hand, shorted their GameStop stock. Compared to the environment in which it has to compete with powerful companies already established in the online distribution industry such as Amazon, the stock price is evaluated as an excessive rise.
Then, individuals declared a war against the short-selling forces and began to buy more and more stocks and raise the stock price. The center was the discussion room opened on SNS Reddit under the name’WallStreetBets’.
Accordingly, the stock price, which was $18.84 until the end of last year, soared to $347.51 as of the 27th (local time). This is a whopping 1,745% increase.
The rise in stock prices was gaining momentum as institutions that had to pay off stocks, as well as individuals’ buying tax, bought high-priced stocks in a’cry and eat mustard’ style.
Short selling is selling stocks by borrowing them, so you have to buy them again to pay them back later. Therefore, if the buy price is higher than the sell price, the investor who sells short will lose.
As a result, it is known that professional investors such as Melvin Capital Management, an US investment company with tens of trillion won in assets under management, have lost trillions of won.
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It seems that domestic investors have also participated in the short-term market gains. Gamestop stock prices are highly volatile throughout the day, and there are a lot of short-term trading.
Currently, the front line between individuals and institutions is expanding to stocks with a high proportion of short selling, such as AMC Entertainment, a US movie theater chain company, and Bed Bath & Beyond, a bedding and bath product chain.
However, such short-term investments are highly risky and require caution. If the stock price is overvalued compared to the fundamentals (basic conditions), it is because someone has no choice but to have the stock at the peak after a’bombing’.
In a statement issued on the 27th (local time), the Securities and Exchange Commission (SEC), the US securities regulator, said in a statement that it is actively monitoring the situation, saying that it is cooperating with related organizations for investor protection and efficient market management.
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