A seachange appears to be undergoing in America as well as in Europe where stock investing by so called ‘retail’ is taking up steam.
Tesla and GME being just the most overt examples of an ongoing transformation in finance.
After battling with short-sellers, Elon Musk has become the richest man on earth. Who done it? A certain ‘retail’ investor who thought his vision deserves the money regardless of what ‘analysts’ say on the old media after short selling.
Tesla’s 1100 P/E was perhaps just a sign of things to come with GameStop (GME) telling a story as old as time: an elite taken off guard by a crowd now informed and with new tools following some technological invention.
That innovation in this case being the digital revolution finally making its way to stocks. Robinhood, Revolut, being just two examples of agile digitally native new entrants that are disrupting the market.
The old guard had taken it for granted that GME was going to bankruptcy. A short bet was certain winning. Doomsday preaching on analysis reports or on the media the common music of just how things were.
Then someone found 60% of all GME stocks were borrowed to short sell. If they’re forced to buy back, 40% is still lower than 60%. Simple maths therefore concludes short squeeze to infinity.
At least that’s the narrative. Gamers – now stock players – angry that their beloved shop may be under threat by an overinflated short sellers narrative, may be another. ‘Retail’ vs ‘institutional’ investors could also fit.
This is challenging to the old guard who expect their orders in analyst’s reports to be followed, mainly because such reports used to be for bankers and by bankers, the close nit ‘Wall Street’ that was in sole command.
Now an army of mainly millennials is forming its own views on how all this works, and is clearly able to flex its muscle.
Equity trading volumes have apparently doubled to $14 billion a day, something that to the crypto space looks small in part because the crypto space is far more bottom up with all major countries having their own exchanges – and usually multiple of them.
Some of these gamers maybe learned a thing or two about how all this is meant to work from bitcoin. So Tesla and GME looks a bit like BTC.
They’re even copying some of bitcoiners memes with their ‘not selling until GME to $1,000.’ If no one sells, price can only go up right?
Traditional media is fuming. They cover the phenomena with trepidation. Yet it was only a matter of time until the digital revolution made its way to stocks, with it probable this is just the beginning rather than a fluke.
The young are coming, and they hungry for fun and change. So long grandpas, you had your days. A poem? Our very own of course:
dances the square
of empty air.
the tools that were
ours now they are
lighting the wayhehay.
the birds of life
dark what it was
transperent maa hehehakes
ours now the game
ours now the gooohhaoohaads.
the peasants arn’t
the cream now dances
for imortal liiheehife.
Up in the arms
new ways now stand
the priests on run.
Reeeevolution knoocks today,
nooot by gun but ooour own way,
taaapping feeelings taaping thoughts,
goone the days are oooof mlord.
Reeevolution beeeats the way,
doooown the chains that theeerewer,
nooo illusion aaaand no priest,
oooours the time and ooours the beats,
innn all llayers anddd all plaayers,
weeee are lords and ourrrs the world.
Reeeevolution beeeeeeat the drums.
Reeeeeevolution heaaaaaar the young.
Reeeeeeevolution heallllll the air.
Reevooluttiaaaaaaaaannnn ours the day.