Reddit’s army of retailers may not have been the only driving force behind the unprecedented GameStop rally that rocked Wall Street, new data shows.
GameStop was “noticeably absent” from the list of 10 stocks most bought by retail investors in January, despite the video game store leading the way in an alleged market revolution, JP Morgan analysts said.
“While retail buying has been portrayed as the main driver of the extreme price hike that some stocks are experiencing, the real picture may be much more nuanced,” Peng Cheng, the mega bank’s head of Machine Learning strategies, wrote in a research note this week. .
In fact, data from Citadel Securities – which conducts stock trades for investment startup Robinhood – shows that retailers generally sold more GameStop stock than they bought from Tuesday through Thursday last week, CNBC reported.
That leaves open the possibility that institutional investors played a bigger role in the GameStop explosion than you might suspect from reading the crude posts on Reddit’s WallStreetBets forum.
For example, the hedge fund Senvest Management made a profit of nearly $ 700 million from the GameStop stake it began accumulating in September and shut down after Tesla CEO Elon Musk tweeted about the stock on Jan. 26, according to The Wall Street Journal.
Cinema chain AMC Entertainment – another darling of the WallStreetBets crowd – was indeed one of the top 10 most bought stocks in the retail market in January, according to JP Morgan, who uses public data and proprietary methodology to track retail trading activity.
But other companies dragged into the fray, such as American Airlines and fashion retailer Express, ended up with the stocks that retail investors sold the most, the bank found.
“Retail activity was very strong in January, and by the end of the month we captured some of the highest market shares in terms of shares traded compared to history,” Cheng wrote.
However, he added, “Reddit users are probably not the only driver of price volatility, and their behavior is not representative of the total number of retail investors.”