Tag: GameStop

Bruised but unbowed, meme stock investors are back for more

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After feeling the thrill of victory early this year by singlehandedly causing GameStops stock to soar only to get crushed when it quickly crashed back to earth armies of smaller-pocketed and novice investors are back for more. These undaunted investors have resuscitated GameStop shares back above USD 300, up from USD 40 in February after plunging from a peak of USD 347. They’re also hauling new stocks onto the bandwagon they say is heading for the moon, including the lesser-known health insurance company Clover Health Investments.

This second wave of leaps for meme stocks are just as staggering the movie theater chain AMC Entertainment soared to USD 62 last week from USD 2 early this year and once again professional Wall Street is calling the gains illogical. Many of these professionals had predicted the phenomenon of regular, small-fry investors piling into a stock en masse and sending it incredibly higher would fizzle out, particularly after they felt the pain of losing some money.

Instead, the frenzy has endured and shows how powerful these investors remain, at least for now. They’re armed with social media where they can convince others to champion the same stocks. They also have zero-fee trading apps that allow many to buy stock options, which can offer bigger gains at a smaller upfront cost than buying a share of stock, in exchange for potentially bigger percentage losses.

They’ll do surprising things if given the tools, said Hossein Azari, CEO of cmorq, a company that helps customers get into cryptocurrencies and advocates for a new world of decentralized finance.

Azari sees it all stemming from people feeling left out as they watched wealthy investors and firms suck up the majority of the economy’s gains in recent years. Now they see a way get some for themselves. They are not out there trying to prove anything, he said. They just want to kind of materialize the American dream for themselves.

Some of the meme-stock buyers believe fervently in the financial futures of the companies they’re backing. Others say on social media posts that they’re merely looking to cash in on whatever the next hot stock is. Most say that as long as other like-minded investors stick together and hold the stock, they’ll protect each other and the stock’s price.

Malcom Ethridge, a financial adviser with CIC Wealth outside Washington, D.C., said a range of his clients want to talk about meme stocks, as well as cryptocurrencies. Ethridge also says it is not only younger investors pushing up meme stocks he’s gotten just as many requests from his clients who are retirees.

I think in most cases, though, they really just wanted a professional to tell them why it wasn’t a good idea to get involved just so that they could stop feeling like they were missing out, he said.

This resurgence for meme stocks is a little different from the earlier supernova. For one, it hasn’t dragged down the broader stock market. Back in January, the mania helped knock down the S&P 500 to its worst day in months. That was a result of fears that some hedge funds would have to sell big, unrelated stocks to raise cash to cover losses they were taking after betting that GameStop would fall.

Several of today’s meme-stock winners do have chunks of their shares sold short, where investors have made trades to profit if the price falls, but not to the same degree as in January. At GameStop, roughly one in five of its shares available to trade has been sold short, for example. Earlier this year, more than 100% of them effectively were, with some getting shorted multiple times.

The buying activity this time around also seems less fervent. Trading in call options, which can give a buyer the right to buy 100 shares of stock at a set price at a later date, surged to a two-month high recently. But its still below the heights set in January.

Over the last year, trading activity for call options on single stocks has tended to move up and down with how restricted the economy has been by the pandemic, according to Deutsche Bank strategists. When people have been leaving their houses more often, call option trading has tended to fall off, which makes the last few weeks a notable exception.

So, if getting burned by plunging prices for meme stocks once before didn’tGae stop them, and the possibility of doing things other than trading options while sitting on a couch hasn’t so far, what could slow the phenomenon?

Regulators and politicians in Washington have been discussing some options, though nothing come out of it yet.

Gary Gensler, chair of the Securities and Exchange Commission, gave a speech Wednesday where he once again criticized gamified investing. Many trading apps use features that encourage customers to make trades more often. That brings in more revenue for the apps but some research also suggests it leads to lower returns for the average investor.

Gensler said he’s asked the SEC’s staff to gather public input on the topic. He also said he’s asked the staff for recommendations on changes to rules that govern the stock market’s plumbing and how trading apps route retail investors’ orders, to make sure they’re getting the best execution.

The SEC and other regulators could look for ways to force trading apps to offer more warnings to customers in hopes of slowing them down, said John Coffee, a professor of law at Columbia University. They could start by making it clearer that trading options can be riskier than buying actual shares of a stock.

Coffee is skeptical GameStop, AMC, and others can hold onto their lofty prices, which would need profits to explode higher extremely quickly to look rational according to traditional models used by financial analysts. That means he’s worried many retail investors may be setting themselves up for big losses in their zeal to ride the meme-stock wave.

And he acknowledges that even if brokerages do offer more warnings, that may not be enough to stop some traders, as social media posts continue to encourage them to pile into certain stocks, and given human nature. As much as I believe in consumer protection, Coffee said, I believe a fool and his money are parted.

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GameStop names Amazon veteran as CEO; sales accelerate

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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GameStop, the video-game retailer whose manic stock movements captivated Wall Street this year, said Wednesday that it brought on a pair of Amazon veterans as its new chief executive and chief financial officer to aid in its much anticipated digital turnaround.

Matt Furlong, who most recently oversaw Amazon’s Australia business and spent nine years with the company, will start as CEO on June 21. GameStop also said that Mike Recupero, who most recently was CFO of Amazon’s North American consumer business, will begin as a chief financial officer on July 12.

GameStop’s stock has been on a wild rocket ride, soaring more than 1,500 percent this year as waves of smaller-pocketed investors piled in on hopes that it can transform itself into an e-commerce powerhouse after sales at its brick-and-mortar stores faltered. Investors pinned much of their hope on Ryan Cohen, a major investor who co-founded Chewy, the online seller of pet supplies.

GameStop said Wednesday that it is still losing money, posting a net loss of USD 66.8 million for the three months through May 1. But that’s not as bad as the USD 165.7 million loss from a year earlier, and its sales of USD 1.28 billion was stronger than the USD 1.16 billion that analysts expected. Sales grew 25 percent even as the company closed some of its stores.

GameStop became the face of the meme stock craze early this year when a fanatical band of smaller-pocketed and novice investors encouraged each other to pile in. That helped trigger a short squeeze, which sent the stock flying.

Professional investors had sold much of GameStops stock short, essentially making bets that would profit if its price were to fall. They were skeptical GameStop had a bright future given the migration of video-game sales toward online channels and away from GameStop’s stores. But after the stock began rising sharply, those short-sellers had to buy GameStop shares to get out of their bets, which created a feedback loop further goosing the share price.

The stock set a record closing high of USD 347.51 in late January, but it sank back below USD 41 within a few weeks. It’s since climbed again and closed Wednesday at USD 302.56.

GameStop reaped the benefits of that surge by selling stock earlier this year to raise nearly USD 552 million. That helped the company end its latest quarter with USD 770.8 million in cash and restricted cash. GameStop said it plans to use its increased financial strength to accelerate its transformation. It already has eliminated all its long-term debt.

GameStop didn’t provide an earnings forecast and it said it believes sales growth is the best way to measure its performance. The company said sales in May rose about 27 percent above last year. GameStop’s stock slipped 7 percent in trading after the markets close.

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GameStop share gains as traders await quarterly report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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GameStop’s stock climbed 3% on Wednesday ahead of its quarterly results after the close, with a cult following of individual investors looking for progress in turning around the struggling videogame retailer following this year’s rally in its share price.

At a brief annual shareholders meeting ahead of the report, GameStop top shareholder Ryan Cohen, the billionaire co-founder of online pet supplies retailer Chewy, was elected chairman. GameStop announced his nomination in April.

“As my dad would say, buckle up,” Cohen told shareholders.

GameStop’s volatile shares have nearly doubled in the past month, and they are now just 11% below their closing high in January. That was when a massive surge driven by investors on Reddit’s wallstreetbets trading forum made the stock the most traded on the U.S. market for several days.

A recent rally in AMC Entertainment Holdings has attracted increasing amounts of attention from individual investors and commenters on wallstreetbets, but GameStop remains one of the most discussed stocks on the forum.

AMC tumbled 9%, and it remains up over 2,200% year to date, compared to a rise of over 1,500% in GameStop.

Options prices imply GameStop’s stock could swing 24% in either direction by Friday, according to Trade Alert data.

While the recent rollout of new videogame consoles is likely to benefit GameStop, analysts warn that its soaring stock price has become disconnected from the company’s day-to-day business. At least two Wall Street analysts recently dropped coverage of the company.

GameStop’s core business of selling new and pre-owned videogame disks is shrinking as consumers move to downloading games digitally or streaming, and it has lost money for the past three years.

Cohen hopes to transition GameStop into an ecommerce business that can take on big-box retailers. He told shareholders at Wednesday’s meeting in Grapevine, Texas that they had “ushered in a whole new era at GameStop,” but he declined to provide a detailed plan.

The company has yet to announce a replacement for Chief Executive George Sherman, who it has said will step down by July 31.

“The bullish views of retail investors and GameStop’s long-awaited transformation strategy continue to overshadow actual results,” Wedbush analyst Michael Pachter warned in a preview note.

GameStop short sellers currently have $3 billion at stake, up from $1.3 billion at the end of 2020, according to S3 Partners, a financial data firm.

Analysts on average expect revenue of $1.16 billion for the quarter ending in April, up 14% from the year before, when the coronavirus economic lockdown crippled sales of brick and mortar stores. Analysts expect an adjusted quarterly loss of 84 cents per share.

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GameStop to launch Ethereum-based NFT marketplace, begins hiring

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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GameStop, the United States-based video games and electronics retailer, has announced that it will get into the NFT market. The company saw a legendary rally of its stocks ushered in by retail traders, users of the subreddit wall street bets, and a dash by short sellers to cover rising positions earlier this year.

The company has revealed that it will launch an Ethereum-based NFT marketplace platform, for which it has already begun hiring a team. The company released an NFT-themed website, nft.gamestop.com, that reads “Power to the players. Power to the creators. Power to the collectors.”

No other details were found on the page apart from the wallet address to an ETH cryptocurrency wallet but the reason for featuring it wasn’t listed either. Apart from launch of the website, the company hasn’t yet made any official announcement regarding the platform.

GameStop recently sold $3.5 million shares to generate over half a billion dollars, which the company intended to use for growth and transformation. While GameStop’s fortunes were lagging, the short squeeze rally and a change in leadership have infused new energy into the company, which it is trying to capitalise on.

However, the company’s move into the NFTs, or non-fungible tokens, comes at an interesting time. Even though NFTs have become more popular across the digital world, the value of daily sales has slumped by $ 160 million in the course of a month. The declines in total sales and daily sales have coincided with the crash of Bitcoin and other cryptocurrency prices. Most NFT platforms use an Ethereum blockchain-based technology.

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Greenlight Capital chief David Einhorn accuses Musk and Chamath of ‘fueling’ GameStop stock buying spree; here is all you need to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a letter to investors, David Einhorn, the president of US-based fund management company Greenlight Capital, has accused Tesla chief Elon Musk and venture capitalist Chamath Palihapitiya of fueling the GameStop trading frenzy in January that prompted a hearing in US Congress.

The shares of GameStop, a US-based video game company, had shot up by 2000 percent as a consequence of Reddit day traders staging a buying spree.

Here’s what happened

GameStop, a brick-and-mortar retail firm, was on the verge of going out of business due to the emergence of e-commerce and the closing of stores following the Covid-19 pandemic. Thus, several short-sellers and hedge funds betted against the GameStop stock. Essentially, these traders hoped for the GameStop stock price to decrease in order to make a profit. To sabotage the bet of these short-sellers, Reddit day-traders bought thousands of shares of GameStop. This sky-rocketed the shares of the video game company.

 Here’s what Einhorn alleges

Einhorn, in his letter, claims that the Federal Reserve System (Fed) oversaw the wrongs of Elon Musk who ‘manipulated Tesla stocks in 2018’.  He added that Musk and Palihapitiya encouraged the buying spree of Reddit users which overinflated the stock price of GameStop in January 2021.

In an indirect reference, Einhorn suggested that the Fed is more concerned about the stock prices and corporate profits than the economy itself.

Meanwhile, Einhorn has also backed American financial analyst Keith Gill’s decision of exercising the call option on GameStop stocks available with him. 

Notably, the letter comes in the wake of Gill, who also runs a YouTube channel in the name of Roaring Kitty, securing 50,000 more shares of GameStop at a strike price of $12.

Earlier this year, Gill had purchased 500 call options — with an expiration date of April 16 — for Gamestop stock. Gill had the choice to sell these options for a profit or increase his total holdings of the stock. He went with the latter. 

According to a CNBC report, Gill — who is known as DeepF—Value on Reddit – relinquished millions of dollars in quick profit to ramp up his stake. 

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Trader in Japan pulled off GameStop-like mania in 2018, comes under regulator scrutiny now

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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An all-too-familiar tale of the GameStop saga took place in Japan back in 2018. Three years later, the regulators arrested a former money manager, Toru Yamada, and another person for their alleged role in market manipulation.

A Bloomberg report stated that Yamada, a day trader in Osaka, Japan, who went by the nickname, Tonpin, was betting on Nichidai Corporation, a small company that makes precision dies and molding products for automobiles, in 2018.

He touted his position on his official Twitter handle, where he has over 55,000 followers. This inspired his followers to invest in the shares of the company. The stock surged six-fold in the first three months of 2018 before crashing.

However, he wasn’t arrested for taking the stock up on Twitter, but on suspicion of trying to keep the price down. In such a scenario, the margin-trading restrictions would have been removed, which could have caused the shares prices to soar.

The incident shows how the  market regulators scrutinise unusual trading patterns and arrive at conclusions often years later. This all-too-familiar tale is reminiscent of GameStop — a brick-and-mortar retailer based in Texas, specialising in buying, selling, and trading of games and game devices — and how its stock price rose, thanks to a Redditor forum.

The company’s stocks have been nosediving since 2016. Someone on Reddit saw a Hedge Fund was heavily ‘short-selling’ the stock. So, a group of amateur day traders at the r/wallstreetbets thread — a longstanding subreddit channel where lakhs of Reddit users discuss highly speculative trading ideas and strategies — decided to get involved. They convinced other people on the thread to buy GameStop stocks. This skyrocketed the share prices.

The Bloomberg report states that Yamada has yet to be charged. It’s not sure if he will be charged. The report also states that it wasn’t clear if the duo had admitted or denied the charges. However, this incident shows the risks associated with becoming a high-profile investor on social media.

According to a regulatory filing, Yamada first disclosed the purchase of Nichidai shares on December 8, 2017. Gradually, he raised his stake. Next year on February 1, he tweeted about it, by when shares price had tripled. In March 2018, Yamada and another man placed a large number of sell orders below the market price to keep the share price below a certain level. As restrictions on new margin trades on the stock were lifted, prices rose by 18 percent. On March 10, Yamada tweeted about this process with screenshots of Nichidai trades.

However, many traders wondered what Yamada had done wrong. According to Bloomberg Akira Katayama, a day trader, wrote after Yamada’s arrest: “It’s amazing that selling to release the margin restrictions is treated as market manipulation.”

Though Yamada’s fate is yet unknown, under Japanese law, he can be detained for 23 days before the authorities press any charges.

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Robinhood might confidentially file for IPO in March

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Online trading platform Robinhood is planning to confidentially file for an initial public offering (IPO) in March. According to a Bloomberg report, the California-based Robinhood Markets has already held talks with underwriters, but a final decision has not been made. The timing of the listing could change, say people in know of the matter.

Robinhood, however, declined to make any comment officially when contacted by Bloomberg. This comes barely three weeks after the company faced a cash crunch when it ran into regulatory trouble.

Robinhood had to draw down its credit lines and raise $3.4 billion to post more collateral with the Depository Trust & Clearing Corporation (DTCC), the industry’s clearinghouse. Given wild swings in stocks, including those of video game retailer GameStop and movie theatre chain AMC Entertainment Holdings Inc, the DTCC wanted members to post more cash.

The trading platform, which has become popular during the pandemic with homebound youngsters turning to its trading app to make money and pass time, recently drew criticism after temporarily halting trading in GameStop and other companies’ shares, after retail investors caused a spike in the shares, shorted by hedge funds.

After this, it was hit by at least 33 federal lawsuits across the United States. Alleging violations of securities laws or consumer protection statutes, most of the lawsuits filed in 10 states, including California, Florida, Illinois, and New York, sought class action.

Valued at $11.7 billion in 2020, Robinhood, has been eyeing a stock market debut for a while now, according to a Bloomberg report.

The GameStop saga has brought Robinhood, with CEO Vladimir Tenev recently testifying before the US House Financial Services Committee.

Last year, Reuters had reported that Robinhood had picked Goldman Sachs Group to lead preparations for an initial public offering, which could value it at more than $20 billion.

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GameStop’s ‘maniacal’ rally: Will it continue?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Struggling video game retailer GameStop saw its stock gain nearly 1,000 percent in January, rocketing from a low of $18. The rally, described by Wall Street watchers as ‘maniacal’ was initially billed as a ‘David vs Goliath’ fight in which an army of faceless day traders managed to give a bloody nose to some powerful hedge funds, which had short sold the stock. Some market commentators saw this as an upending of the social order on Wall Street, and something which was likely to intensify in the days ahead.

The saga began with the announcement that Ryan Cohen, a co-founder of Chewy.com, an online pet store, had joined the video game’s board. According to the Associated Press, investors saw Cohen as someone who could push the digital transformation of GameStop, which has suffered massively due to the COVID-19 pandemic. But Cohen’s joining the board fueled the enthusiasm following which a group called “WallStreetBets” fought Wall Street funds that had pushed the GameStop stock lower.

The GameStop stock happened to be the most heavily “shorted” on Wall Street and the group noticed it. The discussion on the “WallStreetBets” group centred around the video game and they were seen pushing each other to continue buying GameStop, causing the rally. Melvin Capital, a well-established hedge fund, sustained massive losses on its bets that GameStop would fall, reported NDTV.

However, despite what’s been a monster rally, Wall Street analysts believe that GameStop’s stock isn’t sustainable in the long-term. They say the prices, which closed at $44.97 on February 23, could fall as low as $15 in the time to come. The current price of the video game retailer’s stock is already much, much lower than the highs it touched last month when it was at its peak.

The massive fluctuation in the GameStop stock continued even on Monday, Wall Street Journal reported. The prices gained 13 percent to $46, a change in fortune after a string of losses in over two weeks. During last month’s rally, the prices had rocketed as high as $483. However, the volatility in the prices is something the Wall Street analysts have repeatedly spoken of.

After having captivated the market, the stock began tumbling soon after. On February 2, for instance, just days after touching what was an unimaginable figure of $483, the price fell massively to $90. The 60 percent loss came only a day after the stock had taken a 30 percent hit, closing at $325 on February 1.

Comparing the peak, GameStop value with the closing stock on Tuesday revealed that prices have already fallen over 90 percent, weeks after the story captured everyone’s imagination and sent the big Wall Street investors packing.

Not just that, the regulators in the United States are now looking into the possibilities of “market manipulation” or any other “criminal misconduct” that might have caused the massive rally in the struggling video game’s stock.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

GameStop CFO to step down after Reddit driven stock rally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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GameStop Chief Financial Officer Jim Bell will step down next month, the video game retailer said on Tuesday, as it focuses on shifting into technology-driven sales in the wake of headline-grabbing big betting in its stock. GameStop said Bell’s resignation was not due to any disagreement with the company relating to its operations, including accounting principles and practices.

However, a source said that while Bell’s exit was unrelated to the recent wild swings in GameStop’s stock spurred by retail traders on the Reddit social media site, his departure was initiated by the company.

The source, a person familiar with the firm’s thinking, said GameStop had become dissatisfied with Bell as it works to transform into a technology-oriented business and was not confident he would be the right CFO moving forward.

Bell, who will leave the company on March 26, previously worked at brick-and-mortar retailers Gap Inc and Coldwater Creek and restaurant chain P. F. Chang’s China Bistro, according to his LinkedIn profile. He did not respond to requests for comment.

Shares of GameStop fell about 5 percent to USD 42.75 in extended trading after the announcement. The stock has risen about 140 percent this year, after paring most of the gains that sent short-sellers scrambling to cover losing bets and saw the company hit a record high of USD 482.95.

GameStop has also been targeted by shareholders pushing it to focus more on digital sales rather than its mall-based locations.

New directors focused on this strategy have recently joined its board and the source said those additions had helped create more momentum for the CFO transition.

GameStop said it has begun a search for a permanent CFO, adding that it would appoint Chief Accounting Officer Diana Jajeh as interim CFO if a permanent replacement was not found before Bell’s departure.

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Beyond finance: Why the GameStop saga is a rallying cry for democratization of resources?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Authored by Devanshu Jain

Over the past few days, GameStop has become a ubiquitous presence on social media. Every platform has erupted in a frenzy of opinions, jokes, memes, and – most significantly – simplified analogies and abridged explanations for the stock market layman on what precisely transpired in the GameStop saga. Newspapers and TV channels – not just in the US, but also here in India – are chronicling and deconstructing what is being described as a “war” on hedge funds.

How did this happen? How did a Reddit thread inspire millions of small investors to bring Wall Street giant weights to their knees? The answer can be unearthed in regulations that govern US capital markets, and hedge funds in particular.

Regulation’s Frankenstein

For one, brokers in the US are allowed to lend shares to investors, which they keep in pooled accounts. Juxtapose this with Indian regulations: shares are held in individual Demat accounts within the National Securities Depository or Central Depository Services, and brokers are not allowed to lend them.

The lending and borrowing function enables hedge funds in the US to limitlessly short stocks like GameStop and AMC Entertainment, which is what allowed retail investors to facilitate a short squeeze in these stocks. In India, lending is strictly regulated via the exchange platform Stock Lending and Borrowing Mechanism (SLBM) – allowed for only about 350, generally liquid, stocks – and is as such not very prevalent amongst retail investors.

Two, US hedge funds are subject to even lighter regulation and oversight than the rest of the market, allowing them to introduce systemic risk every time they assume unfettered leverage and positions worth billions. In India, leverage is capped at 5 times for overnight positions.

Three, there is no cap on the speculative position that a hedge fund can take while shorting a stock. In India, market regulator SEBI’s Market Wide Position Limit (MWPL) caps the position at 20 percent of free-float market capitalization of the company through SLBM and F&O (futures and options).

That financial ruin for Melvin Capital and others at the hands of a community of small investors was a consequence only of a system rigged in favor of the former is amply clear. So is the fact that India’s regulatory environment is inhospitable for a short squeeze of this magnitude to ever materialize. But structural inadequacies in the governance of US markets are hardly novel. Something else is gripping the world’s attention.

Not too big to fail

The sheer irony of what we are witnessing is not lost on any individual who understands – or is even vaguely familiar with – the kind of devastation that the 2008 financial crisis wreaked on retail investors, homeowners, and the economy at large. Although incomparable on the scale, the GameStop story is equally staggering – not only by virtue of anti-establishment symbolism but also the gravity of implications that it harbors for capital markets going forward. This incident cannot be viewed in silos – it must be contextualized within the global, burgeoning anti-establishment movement taking shape in the deeply divided and unequal society we find ourselves in.

Retail investors, typically mocked by Wall Street investors for their inability to understand and navigate the market, rallying together to deliberately destabilize a $13 billion hedge fund (and others) has every undercurrent of a revolution. The real shock, a CNN article says, is that it didn’t happen any sooner.

What the powers-that-be must understand is this: no market, no sector, no fund is immune from the organizational capabilities of social media and disenfranchised communities. The Internet has birthed the democratization of knowledge that is all-pervasive, providing large-scale access to information that was previously only held by a close-knit group of niche custodians at the top. That power is now decentralized, helping to deconstruct rigid hierarchies and, to some extent, build more equitable and efficient markets. Institutions must accept and adapt to this. Wall Street is not ring-fenced from this disruption of the status quo, and if it continues to behave like its invincible, it will find itself the subject of more wrath from the investor community.

Changing the game

One of the most crucial corrective steps that the US can take is to work on eliminating structural bias in financial markets that heavily favor institutional investors, often at the cost of retail investors. For instance, because earnings of US exchanges rely on selling data feed, investors’ purchasing power determines the quality of data they can access – and retail investors finish last. In contrast, India provides a level playing field in terms of data access, because exchanges make money on the transaction fees.

But the systemic fault-lines – already lying exposed, but brought back into focus, once again, by popular agitation against established forces – run much, much deeper. Consider the vocabulary being deployed in media coverage of this incident. It has been referred to as a class war, an Orwellian saga, the ‘French Revolution of Finance’ – and there lies the problem. No section of society should be “at war” with another. We have allowed this manner of polarisation to fester precisely because wealth, power, resources, and information have been concentrated, for too long, with a select elite, and that chasm is ever-widening.

Going forward, the other side will invariably leverage some of these tools to beat the big guys at their own game. But that is inherently unsustainable – we must change the game altogether. It is this structural polarisation that we must find a cure for, by democratizing access to spaces that perpetuate this division. Just think about it: if millions of loosely-organized strangers on a Reddit thread can band together to spell doom for powerful hedge funds in one day, is there anything they can’t do?

Devanshu Jain is a policy consultant and former communications advisor to India’s ex Minister for IT & Communications. Views are personal.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow