Yes, because it’s causing an accident.
Using the latest data, Gamestop has $22bn of short exposure, double Microsoft/ Amazon and 2nd only to Tesla’s $45bn.
Yet Gamestop has a market cap of $23bn which was only $1.2bn on 12th Jan.
So the shorts are down roughly $20bn + a few $bn on the other financially distressed companies that have also rallied and have to post collateral to account for daily moves.
But the moves have been so rapid (GME’s mkt cap went up $9bn yesterday..), that it seems some haven’t the liquidity to do so – hence the bailouts & the weak market yesterday.
But the “little guys” are up $20bn right?
Who knows, but it isn’t helping, because a few days ago Robinhood raised $1bn to meet clearinghouse deposit requirements which are up tenfold.
And can’t be enough because yesterday Robinhood essentially halted operations with their permitted share purchases changing to only 1 share for all the “hot names”.
Now we have an SEC investigation.
Which may cast light on their website offering “Crypto” through Robinhood Crypto – not regulated by the “Financial Industry Regulatory Authority” but is still apparently:
“Trusted. Secure”
And
“Make a deposit. More coins, less FOMO”.
FOMO?
I think this is a problem.