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| On the 28th (local time), pedestrians pass by the store of GameStop, a video distribution chain located near Union Square in Manhattan, New York City, USA. (AP=Alliance) |
It was not the forces that shook the US stock market, but individual investors (ants). American ants defined hedge funds that hit short selling as enemies, and gathered in social media discussion rooms to destroy them. Because of this, some stocks have repeatedly fluctuated, bringing volatility to the market.
The impact of this situation is attracting attention not only in the domestic stock market, which is about to resume short selling, but also in overseas markets such as Japan, saying’it is not someone else’s business’.
The unemployment rate surged due to the spread of Corona 19, and liquidity was supplied to the market through the central bank’s easing policy. Abundant liquidity money flowed into the stock market and major indexes continued their all-time highs.
However, the biggest beneficiaries of the stock price hike were not individual investors, but wealthy wealthy people who owned more stocks.
According to the Federal Reserve System (Fed), the wealthiest in the top 10% saw their assets increased by 6.7 trillion dollars (about 7487 trillion won) in the phase of stock price rise after the Corona 19 shock last spring. The government’s fiscal policy and central bank’s easing policy to support low-income people resulted in the widening of the gap between rich and poor in the financial market.
Experts point out that this wealth gap will lead to conflict and lead to social unrest. On the 31st, Japan’s Nikkei pointed out that the current situation in which US ants faced the forces of short selling hedge funds “will not end with a disability across the river.” About 70% of the stock transactions traded in the Tokyo stock market are done by foreigners. It is a reality that the Japanese stock market is paying off for the Dow overtime futures price. Even within the New York market, Nikkei said that the Tokyo stock market is considered to be able to control the market to some extent so that the word’colonial’ comes out.
In the midst of increasing non-face-to-face activities due to the spread of Corona 19, Internet stock accounts also increased exponentially. The case of American ants converging on the Internet and winning power is sufficient to stimulate individual investors in overseas markets such as Japan. Nikkei said that there is a division of American society in the background of such a movement, centered on the social media debate, and that regulators and the US politics are also paying attention to the issue.
In’Wall Street Betz’, a discussion room on SNS community Reddit where ants gathered out of anger at the short sale of GameStop, there were overflowing posts saying, “We beat institutional investors.” This is because’Citron Research’, a hedge fund that sold shorts saying that GameStop’s stock price was overvalued, publicly promised to stop looking for companies to sell short.
The stock that shook the US stock market over the past week was definitely Gamestop. In fact, GameStop has not been a stock item in the market. It is not a stock that has been popular with Seohak ants (individual investors of overseas stocks) like Tesla, Apple, and Google, and it is only an obsolete video chain store that is expected to suffer a loss in the first quarter of this year. However, the stock price soared more than five times as ants’ buy orders, which exceeded Apple’s trading value, were rushing to this stock. GameStop has been on the rise in the last week alone, rising 400% (5 times) and 1600% (17 times) in January.
It is said that it was the post on the social media discussion room that created this opportunity, saying, “Deviate short selling.” If the occasion for the ant’s joint struggle was the social media discussion room, it was Robin Hood, an American online securities firm that actually made it possible. Due to the fact that the trading fee is free and that you can invest from just one dollar, the use of individual investors has increased rapidly, and it has become a symbolic trading app that reminds you of Robin Hood when you think of’American ants’. However, on the 28th, Robin Hood stopped trading in some overheated stocks including GameStop. Hedge funds can be bought and sold, but individual investors who could only sell have pointed to Robin Hood as a traitor. The ruling and opposition parties in the US also criticized Robin Hood at the same time, and even the Securities and Exchange Commission (SEC) put a grim stance on examining the situation. As a result, Robin Hood came to explain that the mandatory deposit rose 10 times.
Major markets, such as the New York Stock Market, which open this week, are keen on the aftermath of the ants’ rebellion. If a hedge fund expands the sale of other holdings to compensate for losses from short selling, the volatility of the market could become even greater, so it is attracting attention whether this situation will affect the entire stock market.
Reporter Kim Soo-hwan [email protected]
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