Investing has changed a lot in the past year, and Markets Insider has tracked every twist and turn. We are so far past calling a stockbroker on a telephone and shouting orders on the NYSE floor that even bringing them up as examples can date you.
Markets Insider likes to consider itself part of that evolution. We were born only four and a half years ago, and have found success covering the markets for a digital-native generation of traders. Our written coverage constantly shifts to focus on what you tell us you want to read, and our data pages respect the time it takes to research stocks by putting the most important information at the top.
We’ve loved covering and observing the shifting financial markets from the sidelines, and now we think it’s time to jump in with our audience. We want to allow you, and all the other people who use Markets Insider on a regular basis, to OWN a piece of this generational shift in trading.
Starting next week, we will be auctioning off seminal moments of this shifting stock history on Open Sea, allowing you to bid on the future of trading.
Reddit traders short squeezing the hedge-fund establishment, AMC’s silverback CEO leaning into shareholders as fans, and the SEC keeping traders out of a good bet on Hertz all come to mind as seminal moments in stock history that will shape trading and regulation for years. That’s why we’ve picked these three moments as our first round of auctions.
Each of these moments will be sold as individual NFTs. The NFT will include a historical record of the moment and an explanation of why it matters. We also commissioned three new pieces of art from our world-class graphics team to accompany the auctions. By winning the auction, you’ll be able to brag about owning a seminal trading moment on the fastest growing and most digitally savvy markets site on the web.
These NFTs will not only allow us to interact with you, our audience, but it also lets us participate in the revolution. Quite frankly, we want to live into this new reality and know what it’s like to have cryptocurrency on our company’s balance sheet.
Some Details on the Auctions
The three moments we are auctioning will go live on Open Sea on Monday August 2nd, and you will be able to bid on each of the auctions individually.
We are also hosting an AMA on Reddit to answer any questions you may have about the NFT process and how we decided on these historical moments. That will happen today (Wednesday July 28) at 3pm EST.
We’ve loved chronicling the rapid changes taking place in the investing industry, and we are even more excited to be more involved in its future. This is just one small step in that direction. And one that we hope to take with you.
The stock tested a key support level on Wednesday, as it traded around its 50-day moving average at $37.28. At time of publication, AMC was trading below the key support level at $35.27.
Moving averages are a lagging trend-following indicator that technical analysts use to smooth out price movements and help identify the direction of the current trend in place.
Traders view the the 50-day moving average, which is the average daily closing price of a stock over its previous 50 trading sessions, as a short-term moving average that often represents areas of support or resistance for a stock.
If AMC manages to decisively hold the 50-day moving average as support, then a rise back to its June peak of about $70 could be in order.
But a single trading day above its 50-day moving average is no sure-signal that AMC stock will continue to trend higher, as declining momentum indicators like the Relative Strength Index suggest fewer buyers are stepping in to support the stock than in previous weeks and months.
Another moving average traders will likely have their eye on if AMC falls below its 50-day is the longer-term 200-day moving average. The rising 200-day average is currently near the $14 level, representing potential downside of 60% from current levels.
But a stock’s decline below its 50-day moving average does not mean a swift decline back to its 200-day moving average is in order. One sign traders look for to generate a buy or sell signal is the crossover between the shorter 50-day and longer 200-day moving averages.
A buy signal is flashed when the short-term moving average crosses above the longer-term moving average, as happened for AMC in February. Using this method, a sell signal for AMC would not be generated unless the 200-day moving average crossed above the 50-day moving average.
As AMC tests its key 50-day moving average support level, short bets against the company are increasing, according to data from S3 partners. Over the past week, short bets increased 6% to 5 million shares, worth nearly $200 million.
While AMC short-sellers are down more than $3 billion in 2021 on a mark-to-market basis, that could soon reverse if AMC breaks below its 50-day moving average and trends towards its 200-day moving average.
Nokia shares soared Tuesday after the Finnish telecom equipment maker — considered part of the so-called group of meme stocks — told investors it may lift its financial outlook for the year.
The company said its business has continued to strengthen during the second quarter, brightening prospects for the rest of 2021. Net sales are among the metrics that may be revised later this month.
NYSE-listed shares of Nokia climbed 7.8% ahead of the opening bell after popping up as much as 9% to $5.87. The shares have been swept up in the meme-stock trading phenomenon spearheaded by retail investors who have also embraced GameStop and AMC Entertainment. Traders active on Reddit’s Wall Street Bets forum and other social media sites have been banding together to buy and hold onto stocks targeted by hedge funds betting on their decline.
Nokia said it’s making progress with its three-phased plan outlined in March to achieve sustainable and profitable growth.
“Our first-half performance has shown evidence of this in good cost control and also benefited from strength in a number of our end markets. We continue to expect some headwinds in the second half as we have previously highlighted but our performance in the first half provides a good foundation for the full year,” said Pekka Lundmark, Nokia’s president and CEO, in a statement.
An updated outlook from Nokia would be part of the company’s July 29 release of second-quarter and half-year financial results.
In April, the company reiterated its view of net sales of €20.6 billion ($24.4 billion) to €21.8 billion and a comparable operating margin of 7%-10%. It had also backed its view of positive free cash flow and a rate of 10%-15% return on invested capital.
Shares in meme-stock favorites AMC Entertainment and GameStop continued multi-day falls on Wednesday as some Reddit traders took on heavy losses.
AMC ended the day at $45.07, down 9.8%. GameStop closed at $190.66, for a 4.5% loss.
Since the start of July, AMC and GameStop have fallen around 20% and 11%, respectively, as interest in the stocks has begun to wane. Trading volumes in both companies have fallen, especially for AMC, which last month saw a precipitous run-up amid massive volume.
On Tuesday, AMC enjoyed a brief pop in morning hours after CEO Adam Aron tweeted that the company would abandon plans for a share issuance in 2021, following a wave of social-media backlash. AMC shares would later erase gains and close lower on Tuesday, and continue to fall on Wednesday. The stock is down roughly 18% from Tuesday’s highs.
GameStop’s decline has been somewhat more measured. The stock has trended down since a June earnings call that, despite better-than-expected revenue numbers, disappointed some investors and analysts. Still, GameStop has not yet returned to its relatively sluggish April prices – let alone its dismal 2020 numbers, before the meme-stock frenzy kicked in.
Retail traders who had bet big on AMC using call options have taken to Reddit to post their so-called loss porn. At publication time, the top post on the forum WallStreetBets was of a 79% loss on AMC calls, losing the poster over $10,000.
But some commenters noted that the ill-fated poster’s call options did not expire until January 2022, and so could recover value should another price surge occur.
AMC canceled a proposal that would have asked its shareholders to allow the movie theater chain to issue up to 25 million more shares, SEC filings show.
CEO Adam Aron tweeted on Tuesday that AMC would not proceed with the vote, and added that the movie theater operator will not make any more share increase requests in 2021.
“It’s no secret I think shareholders should authorize 25 million more AMC shares. But what YOU think is important to us. Many yes, many no,” Aron tweeted, alongside an image with the phrases “I see you, I hear you, I value you.”
The share increase was one of five proposals on the agenda during AMC’s upcoming annual meeting of stockholders.
The Board of Directors indicated they were for the share increase, and CEO Adam Aron said last month that the increase would be an important tool to strengthen the company.
Reddit users in the r/AMCstock channel cheered the movie theater chain’s decision to cancel the vote. Many speculated that AMC canceled the vote because so many shareholders had already voted against it.
“He did it! Adam Aron fu**in took the one thing that was dividing apes and squashed it! KING SILVER BACK BABY!!!!!,” one user commented, referring to Aron’s nickname among retail investors on Reddit.
Shares of AMC jumped as high as 5.9% after the Tuesday opening bell.
AMC’s annual meeting of stockholders will take place on July 29 at 2 p.m. central time. Proposals still on the agenda include re-electing certain board directors, approving the appointment of Ernst & Young as independent auditors, approving a non-binding vote on the compensation of executive officers, and voting on the ability to adjourn the stockholders meeting if necessary.
Iceberg Research revealed a short position on AMC on Friday, staking out a claim against one of the buzziest retail stocks to date.
Arnaud Vagner, the main short-seller behind Iceberg, told Insider that AMC’s current stock price, hovering around $50, has been unsustainably inflated by call options activity in the already-tough theater business.
“The volatility of the meme stocks is largely driven by call options, and their ‘gamma squeeze effect,'” Vagner said – referring to a situation where a stock’s sharp price increase forces market makers to buy more shares, accelerating the stock’s ascent.
“However, this effect is temporary and the correction is inevitable. The volume of call options has substantially declined,” he added.
In a series of tweets announcing the short, Iceberg described the AMC “pump” as “increasingly shaky,” calling the weaker fundamentals of AMC “obvious.”
“We don’t accuse the company of fraud. There is a price for everything and we believe the pump has exceeded its average life,” Iceberg tweeted.
In previous years, Vagner’s Iceberg made headlines for knocking some 99% off the share price of Noble Group, a big commodity trader once worth nearly $12 billion, after Iceberg alleged massive accounting fraud.
More recently, the short-seller released a report in April on Diginex, a crypto exchange that went public via SPAC, alleging corporate governance “red flags” and noting the founder had sold 96% of his shares. Since the report, Diginex shares have fallen 23%.
AMC stock has undergone a disorienting run-up in recent months. After spending 2020 in the single digits, it has skyrocketed to as high as $72.62 in early June. AMC was trading at $49.40 as of 12:45 p.m. ET.
Robinhood warned investors it’s at risk of becoming a meme stock when it starts trading publicly.
The company, which filed for an initial public offering Thursday, is making 20% to 35% of its stock available to retail traders through its app, meaning a larger proportion of retail investors may participate in the offering “than is typical,” said the company, which will be listed on the Nasdaq under the ticker “HOOD.”
Retail investors have become known for targeting meme-stock companies and driving extreme volatility in share prices. Take GameStop’s epic rally in January and AMC Entertainment’s subsequent rally in May, for example. If they pour into Robinhood shares in its IPO, that could cause price volatility, the company said.
“High levels of initial interest in our stock at the time of this offering may result in an unsustainable trading price, in which case the price of our Class A common stock may decline over time,” Robinhood said in its IPO filing.
Then, if the price is above what investors deem reasonable, some may short the stock, “which would create additional downward pressure on the trading price,” the company said. Robinhood did not immediately respond to Insider’s request for comment on the story.
Other companies popular among retail traders have similarly warned of price volatility – except those warnings didn’t come until after their stocks had already skyrocketed amid its newfound meme status.
In June, AMC Entertainment told investors to prepare to lose all of their money if they invested in the stock amid its dizzying rally. Orphazyme, a small Danish biotech company, told traders they could lose a “significant portion” of their investment if the stock declined from its unprecedented highs. Car rental company Hertz said at one point its stock could be “worthless” and that investing in it involved a “high degree of risk.”
Ahead of filing for its public offering, Robinhood unveiled the new IPO Access feature that would allow users to buy shares of companies at the IPO price, before the stock starts trading on the open markets.
Robinhood, which launched in 2013, said those shares typically only go to institutions or wealthier investors. “Here’s to democratizing IPOs for all!” the company said in the May press release about the new service.
Retail trading platform Robinhood is facing more than 50 lawsuits stemming from the restrictions it put in place to manage the trading mania in January surrounding so-called meme stocks, according to the company’s IPO filing.
Robinhood in its S-1 filing with the Securities and Exchange Commission on Thursday said it has become aware of about 50 putative class lawsuits and three individual actions that have been filed against it in various federal and state courts. It said two of the class action complaints have been voluntarily dismissed with prejudice.
“The complaints generally allege breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, breach of fiduciary duty and other common law claims,” Robinhood said in the SEC filing. It added that several complaints further allege federal securities claims, federal and state antitrust claims, and certain state consumer protection claims based on similar factual allegations. It said 19 of the putative class actions also name other broker-dealers or market makers as defendants.
The company said it’s being investigated by regulators including staff at the SEC and the antitrust division of the US Department of Justice. It said Vladimir Tenev, Robinhood’s co-founder and CEO, and others have received requests for information and testimony, subpoenas and that the US Attorney’s Office executed a search warrant to obtain Tenev’s cell phone.
“We are cooperating with these investigations and examinations,” Robinhood said.
The company on Wednesday agreed to pay nearly $70 million to settle claims by FINRA that the brokerage misled millions of customers, approved ineligible traders for risky strategies, and didn’t supervise technology that locked millions out of trading.
Robinhood has been the poster child of the commission-free trading movement that has drawn a new generation of investors into the stock market, and its user base skews heavily to Millennial and Gen Z investors. From iconic companies like Apple, to upstarts looking to disrupt whole industries, here are the top 50 stock picks among Robinhood users.
Workhorse, the Loveland, Ohio-based electric-vehicle maker, has become a retail favorite among other auto manufacturers, like Lordstown Motors and Canoo.
Shares of the plane-maker have rallied more than 12% so far this year.
Meme stock and Reddit favorite AMC Entertainment soared on Monday, surging as much as 10% following a strong weekend at the movies.
Driven by hot weather and the opening of “Fast and Furious 9,” AMC saw more than 2 million guests visit its theaters over the weekend, representing a post-pandemic record for the company.
“Fast and Furious 9” also broke records, with the movie generating $70 million in ticket sales over the weekend. That’s the biggest opening weekend for a movie since 2019’s Star Wars: The Rise of Skywalker.
According to AMC, six of its movie theater locations represented the top 10 busiest theaters in the US. And an additional 500,000 people visited AMC’s international locations over the weekend, according to the company.
“The combination of widespread vaccination and the release once again of blockbuster movies is proving to be the magic formula for the return of moviegoing,” AMC CEO Adam Aron said.
Despite the near-record stock price and an improving outlook for movie ticket sales, some investors remain unconvinced that AMC is worth its current market valuation of nearly $30 billion. Short interest as a percentage of AMC’s entire share float still stands at just below 20%, according to data from ShortSqueeze.