Penny stock Reddit thread cracks down on shills as users surge
Sarah Ponczek, Bloomberg News BC-Penny-Stock-Reddit-Thread-Cracks-Down-on-Shills-as-Users-Surge , via Bloomberg
The explosion in penny stock trading has been so abrupt that a Reddit thread devoted to it has been forced to update regulations to curb user shilling.
âTHE RULES HAVE BEEN UPDATED! TAKE NOTE!,â blared a post in r/pennystocks Wednesday night. Among the tweaks were changes to the type of content permitted in the thread and the official banning of cryptocurrency-related chatter.
Social media platforms and websites such as Reddit have become must-reads for the Wall Street stock set these days. A forum called r/wallstreetbets, which boasts 1.9 million users, has shown an astonishing ability to move prices. In less than a year, 1 million new users have joined. Now, with penny stocks surging last month, more than 1 trillion shares of tiny,
Market newbies discover penny stocks, and 1 trillion shares get traded
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By Sarah Ponczek and Elena Popina
January 15, 2021 1.28pm
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In New York, there s Broadway, off Broadway, and off-off Broadway. A similar hierarchy exists in the modern equity market, and it s in the third category of way-off-exchange trading where today s retail speculator is really going to work.
While there have been many examples of trading volume explosions in low-priced NYSE and Nasdaq stocks in the last few months, a whole other ecosystem of speculation exists outside the regulatory reach of these venues and it s been booming. Out past the broker-operated venues where Robinhood trades get executed, it s lightly regulated quotation systems run by firms like OTC Markets, where more than 1 trillion shares in some of the riskiest companies changed hands last month.
In a world where all it takes for a company to go crazy is a quasi-mention by Elon Musk tweets, it should be no surprise that such shares are back in vogue.