Pump of the Day

Investing
#1

After so much pumping lately, why not create a topic about the Pump stocks?

Disclaimer: Pump/Dump is an illegal activity in US and in other countries. The US financial regulator, SEC, already announced investigations in GameStop stock. And in US, they take that very seriously.

Yesterday Pump stocks:

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Some Bloomberg news articles about this phenomenon:

A bit of off-topic:

A side effect about the pumping mania, financial instability and trading platforms instability due a very abnormal volume.

Note 1: Chasing Pump/Dump stocks is a very speculative and risky strategy. Caveat Emptor!

Note 2: PUMP and DUMP aren’t stock tickers/symbols. :smiley:

EDIT:
Disclaimer: Not invested on any these stocks.

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GameStop & AMC Entertainment In Reduce-Only Mode
#2

brokers and regulators are starting to stomp out stock pumps so IMO the next thing is crypto pumps. Today’s crypto pump: dogecoin.

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#3

Some information about GameStop from someone on LinkedIn on 25/January/2021:

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#4

Today performance on some Pump stocks:

AMC: -50.75%
GME: -31.55%
BB: -37.65%

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#5

yup, pumps go up fast and down just as fast! makes sense with GME as robinhood has now stopped people buying it, probably the main place of purchases.

#6

apparently American Airlines is in a pump now

#7

Not just Robinhooders, also on Trading 212. In Trading 212 Hotlist (top 20):

5 - Nokia ADR: 61.8k users
12 - AMC: 52.4k users
13 - Blackberry: 51k users
16 - GameStop: 46.9k users

https://www.trading212.com/en/hotlist

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#8

Weird that stocks go down when you can only sell them. Who would have thought.

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#9

Ha ha, thanks. I already know, more than 20 years investing.

#10

and look at the fallers in the last hour, all of these being sold off unsurprisingly.

#11

I guess pump and dump is not the exact situation here where people try to short squeeze.

Also I wonder which part is illegal? Of course false claims etc can be illegal, but aren’t people buying into these stock due to high percentage of shorts?

Having circuit breakers is okay as well as investigating any manipulation, but preventing people from buying heavily shorted stocks does not make sense for me. If there is no leverage in place, why would brokers interfere with the decision of retail investors?

Disclaimer: I haven’t bought any of these stocks while they are pumped. But I happened to sold NOK at 9.79 :smile:

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#12

Very true. Went to a smoke, and now AMC and GME falling 67% and 64%! Oops.

A harsh lesson for FOMO investors, that chase Pump/Dump stocks. My sympathy to all of them at this hour.

#13

from what I can tell it’s legal for a group of people to get together and agree to buy a stock, what’s not legal is any deception saying a reason why to buy etc that is wrong.

regarding brokers, from what I believe they can do whatever they like, if they want to suspend a stock that’s up to them for whatever reason and it’s in the agreement terms probably so that’s it.

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#14

true, some people will lose out on this, people are actually lucky that T212 didn’t allow them to buy and lose out. (or you could argue if they could buy then others would buy and the price would have gone up, but we will never know)

#15

Sure, probably terms and conditions allow more than that. But it is really weird to see all large brokers collaboratively halt buy side of trades for some stocks. They actively affected the price movement of these stocks and can short these stocks as well while preventing people from buying them.

#16
#17

yeah it’s weird and very unusual situation, this whole GME thing is just nuts. I guess it sets a future precedent that brokers might do this again and the risk of getting into these pumps and squeezes is even more risky knowing your broker might just pull the plug.

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#18

I would also say, I think that crypto exchanges will bring in more stock tracking crypto coins soon and this will become more mainstream and maybe is where some trading might go to get around these kind of things, (buy the crypto coin for GME instead of GME itself)

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#19

This is squeezing a heavily shorted stock, it’s the safest bet if it’s allowed to continue. 130% of the float has been shorted all that needs to happen is for the price to stay high enough for fridays call options to be ITM when this happens and the Shorts expire they will need to return 130% of the stocks that they don’t have any more…

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#20

Not all are short squeezes.
There aren’t any safest bets, there is always risk. For example, the shorters could short even more. Wins who have more firing power, the longers or the shorters.