Find below the joint statement regarding ongoing market volatility issued by Allison Herren Lee, (Acting Chair of SEC), Pete Driscoll (Director, Division of Examinations) and Christian Sabella (Acting Director, Division of Trading and Markets) on January 27, 2021.
"We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants."
Analyst Comment - MCM
'The wisdom of Caveat Emptor resonates here. It would appear that a group, operating at Wall Street short stock around self-fulfilling prophecies and talk up stock they are long in.
The valuations for some high growth companies in the market raises concerns as they have moved in the opposite direction of the economy, consumer demand, and consumer sentiment. Yes, there are efficiency gains from the pandemic remote work and down sizing; but it cannot justify over 50% increases over the twelve months of a lock down and global recession.
Yesterday, we saw how the small investors sought to hurt Wall Street firms by pushing the price to their stop loss. Unfortunately, and as a collective - polite word for cartel - the Wall Street firms have considerable resources and their bet is to exhaust the small investors. Wall Street will win either way. The mere signaling has, in all likelihood sent Wall Street firms betting on both sides of price movement.
There will be time for a post-mortem and a review of winners and losers for lessons (if any) about a stock that increasingly looks like a dinosaur.'
1. White House 'monitoring' GameStop share surge as US hedge fund pulls out - The Guardian UK, Jan 27, 2021
4. How GameStop found itself at the center of a groundbreaking battle between Wall Street and small investors - Edward Helmore in New York, The Guardian UK, Jan 27, 2021
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