The WSJ had this article a week ago, Meet the Market’s Messiahs of Momentum (Jason Zweig, Feb 13th, 2021). Obviously I changed that title a little bit to give you my flavor.
Who are the “messiahs” of momentum ? You know, the usuals, Elon Musk, Mark Cuban, SPAC King Chamath. Also you got rappers like Snoop Dog. These are people with a huge social media following.
Chamath pumped up $GME crazy last month.
“At 10:32 AM EST on Jan. 26, Mr. Palihapitiya tweeted that he has bought call options on GameStop adding: “Let’s gooooooo!!!!!!!” By the end of the next minute, GameStop’s price had jumped 9.6% as trading volume quadrupled, with nearly 10,200 lots of 100 or fewer shares changing hands, according to a WSJ analysis of market data from DTN.
At 4:08 EST the same day, Mr. Musk tweeted :Gamestonk!!. More than a quarter-million shares traded immediately and, by the time 10 more minutes had elapsed, GameStop had shot up 31%. The shares, at roughly $144 before Mr. Musk’s tweet, surged to nearly $348 the next day, then fell to about $50 by this [last week], this week closed at $40
On Feb. 3rd, Mr. Cuban tweeted “If I had to choose between buying a lottery ticket and #Dogecoin,…I would buy #Dogecoin.” Over the next 12 hours, the digital currency shot up roughly 50%.”
WSJ
This is price manipulation, whether Musk had any positions in GameStop or not. Of course, these billionaire “influencers” can say they did not tell anyone to buy anything. Nevertheless, they moved the markets. Whoever got in and out fast enough made a lot of money. Whomever stuck around[assuming they bough on the momentum Musk or Palihapitiya created], lost.
The point is, these billionaires are playing roulette with people’s money, via social media. They are making a market, out of shit, literally. [Dogecoin has gained more than 1,300% in 2021, even though it was conceived as a joke and has no practical use -WSJ].
Never trust a rich man. Especially with your money.
Maybe someone at the Securities and Exchange Commission will read my article (it’s not the only one I wrote on this bullshit). Maybe not. The Twitterati [I use that word to mean the Twitter elite] with millions of followers will continue to peddle their wares. But you need to understand these people are only interested in laying more money into their already full pockets. Their insidious intent is to stir up interest, reap the froth and leave behind a lot of dung.
Until next time,
Max Cantor
Have you been enjoying Power, the Starz series ? I know I have [catching up here…]