SEC Warns Against Meme Stocks


The Securities and Change Fee (SEC) is warning traders towards in style “meme shares.” But, they’ve gone too far by providing direct buying and selling recommendation. Particularly, the SEC produced a video (see under) about GameStop (GME) that has retail traders reeling.

GameStop was definitely buying and selling in unstable territory throughout Q1 2021. A gaggle of on-line retail traders promoted the inventory and allegedly have been partially accountable for inflicting Melvin Capital hedge fund to lose 53% of its capital in January. The quick squeeze appears to be extremely exaggerated and the 4 largest asset managers on this planet owned 39% of GameStop on the time. Those that traded correctly, or just bought fortunate, profited off of the volatility, however, clearly, that isn’t really helpful for the newbie investor.

The issue right here is that the SEC is attempting to discourage the retail investor to guard the hedge funds. The SEC shouldn’t be telling the general public which shares to keep away from and I don’t imagine the shareholders of GME or different “meme shares” can be pleased with this recommendation.

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