What’s happening with Gamestop?
It’s something you heard a lot of the past two weeks, but you’re not likely to hear it as much anymore, as the values of the equity settle much lower than the peak.
As of today, GME is trading solidly around $90 per share – that’s a 300% loss from the recent summit around nearly $400 per share.
AMC is also back down to more traditional levels.
Over at Reuters, Tom Westbrook and Sagarika Jaisinghani suggest that the focus has shifted from the real-time market volatility to trying to prevent this type of thing in the future.
Janet Yellen is set to meet with the SEC, Federal Reserve Board, Federal Reserve Bank of New York and the Commodity Futures Trading Commission to talk about addressing market volatility in some form.
What has analysts and pundits scratching their heads is how these regulators could ever tackle something as abstract as populist stock purchasing. Is it market manipulation? If the activity in question consists of individuals simply telling each other how great it is to invest in one stock or another, it seems nearly impossible to tie this to any practical regulation at all.
At the same time, Westbrook and Jaisinghani report the SEC is “reviewing social media posts for signs of potential fraud,” citing Bloomberg reports Wednesday.
Those who are paying attention would like to know what this means: looking at the actual Bloomberg piece, Benjamin Bain and Daniel Avis are covering SEC suggestions that either “professionals” or bot activity could have contributed to the rallies.
“U.S. Securities and Exchange Commission investigators are combing social media and message board posts for signs that fraud played a role in dizzying stock swings for GameStop Corp., AMC Entertainment Holdings Inc. and other companies, according to people familiar with the matter,” Bain and Avis write. “The scrutiny is being done in tandem with a review of trading data to assess whether such posts were part of a manipulative effort to drive up share prices, … The regulator is specifically on the hunt for misinformation meant to improperly tilt the market…”
A prevailing sentiment over at Reddit is that they can comb.
“What’s the difference between Jim Cramer going on national tv and recommending to buy or sell a certain stock, and people on here deciding to get behind a certain company stock?” asks WKID1, amid dozens of other similar common-sense questions about the reach that it would take to indict some individual for “fomenting a buy sentiment.”
Keep an eye on this one. It is going to have major effects on how we approach markets in the future.