Welcome February – was January wild enough for you?
This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.
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Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at Kryptonio a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords and Weekly Columnist at Daily Fintech) @iliashatzis wrote GameStop. GameOver. A New Reality is Here
GameStop is an American video game, consumer electronics, and gaming merchandise retailer and last week it was the talk of the town. To summarize what happened, a group of users on the r/WallStreetBets, a Reddit forum where participants talk about stock and option trading, noticed large short positions on Gamestop, almost 140% of the available stock. Hedge funds had borrowed and sold more shares than the company issued, an illegal practice known as naked shorting – selling short shares that have not been affirmatively determined to exist. The forum’s users organized and began buying Gamestop, driving its price to a peak of $469 on Thursday, a 1,700 percent rise since December. In just a few days, the company’s market value jumped from $2 billion to $24 billion. GameStop wasn’t expected to return profits until 2023, so hedge funds shorted the company’s shares, betting that its price was going to drop. With the price increase some of them lost their shirts. Hedge fund Melvin Capital Management lost 53% on its investments in January because of the GameStop rally, forcing it to close its position and its backers (Citadel and Point72) to pump $3 billion into the fund to keep it afloat. What happened with GameSpot is not something that happen overnight. It’s been brewing over the last decade, with several trends developing and leading up to this. The norm of big players sticking it to smaller players and profiting at their expense was turned upside down. For the first time an army of small investors beat Wall Street hedge funds and banks at their own game. What happened with GameStop is testament of a new reality that is underway, changing the face of financing.
Editor note: Crypto is usually considered to be the wild west of investing/trading. This month, the legacy equity markets made crypto look tame and boring. Or maybe crypto DEFI & Security Tokens are getting mature enough to take over soon.
Tuesday Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: 4-parter on Wall Street Bets vs Hedge Funds. Part 1: Occupy Wall Street gets even.
Some stories are too complex for our 3 minute attention span. For those stories we do 4 parts, one week apart, each a manageable 3 minute type read. Wall Street Bets vs Hedge Funds is one of those stories for sure. Today we start with the populist part of the story, how the Occupy Wall Street folks decided to listen to the old mantra “don’t get mad, get even”.
In honour of the subject, these 4 posts will be free ie outside our paywall.
Editor note: Tune in by subscribing to get the next 3 posts in this series
Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote Stablecoin News for the week ending Wednesday 3 February 2021.
This weekly snapshot is the news that matters in the Stablecoin market.
Rintu Patnaik, an Insurtech expert based in India, wrote: Insurtech Partnerships On A Roll, While Funding Sees Sunniest Year
Globally last year, insurtech investment continued to grow amid an unprecedented business environment. Total funding across private investment deals reached an all-time high of US$7.1 billion with 377 deals – the highest in any year to date. Compared with 2019, annual funding rose by 12% while deal volume by 20%. The last quarter ended with insurtechs raising US$2.1 billion from 103 deals. Within insurtech, P&C continued the trend of higher funding and deals than life & health, amassing 67% of funding and 73% of deals in Q4 2020.
Editor note: As Investors chase growth in a ZIRP/NIRP world, VC funding is on a roll.
Editor note: This weekly snapshot is the news that matters in the XBRL market.
Editor note: This weekly snapshot is the news that matters in the Alt Lending market.
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