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The Securities and Exchange Commission said Friday it is reviewing the recent volatility in GameStop and other stocks. Good. Not nearly enough is known about the perverse incentives and feedback loops driving these market movements. For example, who is in this “crowd”?....In the GameStop run-up, have there been crowd instigators on Reddit with undisclosed ties to institutions that have a financial stake in the outcome? The SEC might like to know.And what role has been played by hedge funds standing to profit from the dizzying price increase?...BlackRock, owning 9 million shares of GameStop — likely made more than $1 billion on the madness.
Old_Joe said:This just gets better and better.
This just gets better and better.
New York-based hedge fund Senvest Management started investing in GameStop before it caught fire with much of the r/WallStreetBets crowd, and by October 2020, it owned more than 5% of the company.....after GameStop stock peaked at more than $400, the hedge fund walked away with a $700 million profit...."Given what was going on, it was hard to imagine it getting crazier," Senvest CEO and fund manager Robert Mashaal told The Journal.
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How much do you think the market goes down ..80%? 90%
Is this crazed thinking?
Watching the news, it's getting crazier and crazier. Baseball_Fan may be correct that this could lead to something larger. Let's face it, stocks are way overvalued as is the market. We all know this. Granted, there are a lot of reasons for this irrational exuberance such as no other option and trillions of dollars of play money, but it's still insane.
What I'm watching is the spillover into the silver market. Silver has long been shorted enormously and there is an attempted short squeeze going on not unlike when the Hunt Brothers tried back in the late 70's. The problem with squeezing the silver shorts is the government normally steps in early. It'll be curious. Right now, there is limited available gold and silver bullion coins. The mint is out. Here are a couple of articles from kitco, but please realize that kitco is in the business.
Now. In all honesty, I don't see how a reddit type of squeeze can work in silver or for that matter, gold. The paper price is set by the futures market and most contracts are simply rolled over rather than someone actually 'taking delivery'. Granted, there is only about 44% of silver available to cover the shorts, BUT the authorities will change the rules if too many want to take delivery. What is happening is the demand for physical silver is skyrocketing, BUT that's simply resulting is an increase in the premiums. And this is the divergence between the paper price and the street price. Very curious to watch.
and so it goes,
peace and wear the damn mask,
Stay Safe, Derf
The BlackRock Advantage Small Cap Core fund holds 0.03% of its assets in GameStop, according to Lipper.
Overall, BlackRock, the world’s largest asset manager, owned about 9.2 million shares in GameStop as of Dec. 31, 2020, spread over several funds. If BlackRock has not since sold any of those shares, its stake’s value is up $2.4 billion since the start of the year.
In addition to showing individual funds and fund complexes/institutions holding the largest number of shares, one can find the funds with the highest concentration of shares.
Theoretically an institution with a large number of shares can move the stock price, but this assumes it has the flexibility to do so (i.e. the shares are not in index funds with stringent constraints). What matters to fund investors is the ownership concentration in funds they own.
For example, SPDR S&P Retail ETF XRT has 19.34% of its assets in GME (per M*). According to the fund's web page, as of January 29th, that was 19.47% of the fund.
What Schwab Fundamental Large Company ETF FNDX is doing with 2½% (per M*) of its portfolio in GameStop is beyond me. I guess one has to read index providers' definitions carefully. According to Schwab, as of Jan 28, the fund's 1½% allocation to GME was its 5th largest, nestled between JPMorgan Chase (JPM) and AT&T (T).
Reuters may have confused Lipper data regarding two different Fidelity funds that are clones of each other. Fidelity Series Intrinsic Opportunities FDMLX is a $13.7B fund, while Fidelity Flex Intrinsic Opportunities FFNPX is a tiny $36M fund.
As of their latest quarterly reports (posted Dec 29, 2020), the Flex fund did have 0.639% of its assets in GME, but in such a tiny fund that amounted to nothing ($161K). The larger Series fund held 44x as much stock, but that constituted 0.59% of the fund. Close, the funds are clones, but not the same.
The Fidelity Series funds are for use by other Fidelity funds. So even the small 0.59% ownership is further diluted by its inclusion in other funds.
The Intrinsic Opportunities funds (both of them) are managed by Tillinghast. FLPSX's position in GME amounts to just 0.09% of the fund, as of its latest quarterly report.