Feb 05, 2021 07:30 PM EST
Despite the GamesStop trading frenzy before January ended, it appears that it was not really the app that was highly favored the previous month. According to new data, the GameStop mania might not have been the rebellion that people thought it was.
Data on the 10 most-purchased stocks by retail traders during the highly-talked about market mania last month revealed something peculiar: there is no GameStop on the list.
Among all the stocks involved in the drama last month, GameStop was the one that made headlines. Even though people heard about AMC Entertainment and silver, the whole phenomenon was usually called the "GameStop drama" even.
New data by JP Morgan however showed that only AMC Entertainment and Plug Power, were the ones who were the more popular buys among retail investors. The brick-and-mortar video game retailer was the one who put Wall Street on the defensive and yet it is not on the list. Analysts have an explanation, as reported by CNBC.
READ MORE: Stefan He Qin, Wolf of Crypto Street, Pleads Guilty Over Securities Fraud
According to the analysts, contrary to what was said earlier, institutional drivers and not retail investors are the ones who can be considered big drivers of the wild price action in the latter weeks of January 2021.
The prevailing and old narrative was that a group of Reddit-inspired small traders rose up and banded together to fight Wall Street giants and buy GameStop shares en masse. Based on the usual explanation, they worked in tandem and forced a short squeeze by professional hedge fund managers, who are said to be compelled to cover their negative bets or otherwise lose in a meteoric way.
New analysis after data showed GameStop nowhere the the top ten stocks that retail investors bought claimed that institutional investors are the ones who purchased the shares more.
"Although retail buying was portrayed as the main driver of the extreme price rally experienced by some stocks, the actual picture may be much more nuanced," JPMorgan global quantitative and derivatives strategy analyst Peng Cheng explained to clients in a note.
JPMorgan's quant team derived retail investor activity by utilizing public data from exchanges and applying their own proprietary methodology. This method enables them to know which flows are from retail traders and which are from institutional ones. GameStop was only at the number 15 on the firm's retail buying list for January.
This means that there were also some hedge funds winning even though the whole drama's point was to take down the hedge funds who are supposedly the big guys in the eyes of Reddit investors, and therefore, the so-called "enemy."
"Maybe it's not as much of just the little guy versus the big guy," JMP Securities analyst Devin Ryan explained. "I think that it's reasonable to say that institutional investors were also very active in those stocks last week because there are institutional investors that participate in names that have elevated volume. I think most likely that was also expressed in some of the options activity last week as well."
In other words, there were hedge funds that saw what was happening and decided to go to the supposedly winning side, and siding with the Reddit investors by buying up GameStop shares as opposed to betting against the video game retailer's stocks.
"What was going on in the stocks forced the hedge funds to trade to cover, or they might have been playing, too, to win," said Piper Sandler analyst Richard Repetto. "There always could be the hedge fund that was totally uninvolved, wasn't short, but saw what was going and said this might be a way that I can profit just by going long."
One prime example is the New York-based hedge fund Senvest Management. According to The Wall Street Journal, it made $700 million off of the GameStop drama.
READ MORE: Super Bowl 2021: Miller Lite Giving Away $8 To Battle Michelbob Ultra Head On
And the world of NFTs expands far beyond art and collectibles. A new era of tokenized digital assets is being created using the blockchain. Here are seven unique NFT use cases that the interested investor should know.
However, there are some simple steps that anyone can take which will help to improve their performance when it comes to trading foreign exchange markets. Here are ten small things that can make a big difference in your FX trading success.
o prevent significant losses, risk management expertise is essential. His adage, "Rule No. 1: Never lose money," has become a stock market classic. Never forget Rule No. 1; this is Rule No. 2. This practice is followed by even the most successful investor, Warren Buffett, who advises others to follow suit.
One of the significant advancements is shifting the payment operations for remote workers. If the compliances are not met, it may lead to severe legal complications. The owner and organization may be held labially separately. The remote working lifestyle continuously grows and is a testament to becoming an endless working mode. Today we discuss components for payroll for remote workers
BRG International Founder Matias Alem had recognized this fact for a few years. So he remodeled his real estate brokerage into something completely new to solve the problem for his jet-setting international client base.
Ryan Early, hailed as 'Farmer Ryan' among sustainable agriculture experts, is a busy man. He has a laundry list of companies to his name, including Blue-Green Ventures, the company behind the revolutionary product, Blue MagicTM, a non-toxic and eco-sustainable pest preventative product using his patented BiomeMax TM Pheromonal Replication Technology.
Investor, financier, and expert in both cryptocurrencies and blockchain technology, Joy Mbanugo is the go-to in the sector. She has vast experience and knowledge across tax services, auditing, business operations, financial analysis, capital markets, and other specializations.
When Nick Collins was just 14 years old, he started his first business, which included around-the-clock phone calls and numerous questions from his parents. In fact, he began building his stout portfolio in the seventh grade by doing web design, incorporating creative content with brand strategies and plugging in a then-fledgling tech Flash.
Barry Gabster is the founder of InitiateU and is a leading proponent of the marketing mailer revolution, having already taken his company to 10x growth in 2021, alone. In fact, the exponential growth has seen the company rise from $800K-$8.5M just on word-of-mouth referrals.