January’s biggest hits: Stonkhead edition
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Stockhead’s biggest market th(memes) of January 2021.
Happy New Year, they said.
It started with billionaire and Alibaba founder Jack Ma pissing off the Chinese Government and kinda vanishing for a few weeks. He was found fixing his mum’s aircon.
China started paying twice as much for coal because it chucked another hissy and wouldn’t buy Australian.
Power grids went down across the country and Old Xi found himself in a tough spot.
US Democrats clinched two crucial seats in the Senate runoff elections. It means the Democrats will control the White House, Senate and House for the next two years.
Trump supporters then breached the US capitol building.
Joe Exotic has entered the Senate Chambers pic.twitter.com/GW9N9EQh9u
— Quoth the Raven (@QTRResearch) January 6, 2021
That’s week one of 2021.
Social media banned ‘The Don’ for being a dick. He was impeached (again) and markets got really boring.
Bitcoin hit $54,550 … and then promptly dropped to $40,000, wiping away $US260 billion in value.
Wall Street hit a new all-time highs. Multiple times.
Nickel, copper, battery metals, tin, iron ore – the commodity boom kept booming. They say uranium is next.
Then a merry band of 2.1 million Redditors put some cashed up hedge funds to the sword.
The battle over US stock GameStop represented an extraordinary fight between rich instos and the disgruntled retail class.
It was a powerful and unprecedented narrative and, at the start, retail appeared to be winning.
Melvin Capital, the $US12.5bn hedge fund at the centre of the GameStop drama, lost 53 per cent of its value in January.
Retail traders, spearheaded by punters on r/Wallstreetbets, recognised that some hedge funds – like Melvin — were very short GameStock and caused a ‘short squeeze’.
This happens when the price of a stock or other asset increases quickly, forcing the short sellers to buy it at a higher price to prevent even bigger losses.
This buying momentum forces prices even higher.
The result looks like this:
GameStop’s new market cap briefly put it in some rarefied air.
Punters somehow confused the ultimate meme stock with ASX listed minnow GME Resources. It was hilarious.
Then the big boys started winning the game again. GameStock plummeted to ~$50 a share and punters lost a lot of cash.
Most people still have no idea what happened.
Case in point: Who wrote this SMH? Almost every single one of these definitions is wrong.