Michael Burry, high-profile investor and prime meme bull market known for his portrayal in the movie ‘The Big Short’, said on Twitter last week that he had received a Securities and Exchange Commission subpoena related to to the agency’s investigation into GameStop (GEM).
Some recent business issues have also been a headwind for the meme stock frenzy. Many original meme stocks – including GameStop, AMC Entertainment (AMC) and BlackBerry (BB) – fell on Wednesday.
But institutional investors are still noticing the boom in retail. In a new interview, Suzanne Shank – the president and CEO of investment bank Siebert Williams Shank – said retail investing is “here to stay”, although she warned against the mentality herd that can lead to such exchanges.
“As a business, we don’t sell directly to retail,” says Shank, who spoke to Yahoo Finance on Sept. 16. “But obviously as a market player we see the impact of retail, which has been quite significant.”
“The question is whether – all of them – seem to operate in packs and move together and stack, instead of making the same measured investment decisions as institutions,” adds.
“But there’s no doubt that the retail factor is here to stay, and it’s going to play a big role in how stocks move on a day-to-day basis,” she says.
Off-exchange trading accounted for 47.2% of total US stock trading volume in January 2021, down from 41.5% last year and 37.3% from the same month in 2019, according to analysis by the professional association SIFMA.
In results released last month, trading platform Robinhood (HOOD) reported 22.5 million user accounts containing cash, a 130% spike from 9.8 million in the same quarter last year. ‘last year. There were 7.2 million such accounts as of March 2020, the company said.
But wealthy investors continue to dominate the stock market. The richest 10% of American families own 84% of global stocks and 92% of directly owned stocks, according to a 2019 Federal Reserve survey analyzed by The New York Times.
Billionaires have added $1.8 trillion in wealth during the pandemic, according to a report released last month by the Institute for Policy Studies. Observers attribute the gains in part to the disproportionate amount of money wealthy people hold in the stock market.
Shank started her career as a civil engineer, before realizing she could have more impact by funding projects than by designing them.
After earning a master’s degree in business administration from the Wharton School of the University of Pennsylvania, she co-founded the investment bank Siebert Cisneros Shank, which later became Siebert Williams Shank.
Speaking to Yahoo Finance, Shank noted that the rapid dissemination of information through finance-focused media helps retail investors compete with institutional traders.
“I think the advent of the average investor’s access to CNBC, Yahoo and other media gives retail investors more information,” she adds.
“[There] It used to be that institutional investors were the only ones getting hot news – and now I think everyone gets hot news.”
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