By Lee Kyung-min
The U.S. GameStop saga is unlikely to materialize in Korea, due largely to a tighter financial market system where small retail investors have limited influence in spiking up share prices through short-selling, according to market watchers, Wednesday.
The much-politicized investment method is widely used by foreign and institutional investors seeking profit after selling borrowed shares at a lower price in a bear market at the expense of retail investors.
Melvin Capital Management, a New York-based hedge fund that bet against the American consumer electronics and gaming merchandise retailer, lost over half its assets after the shares skyrocketed 2,000 percent in January, driven by organized purchases from small retail investors seeking to dry up short-selling funds. The firm s assets dipped to $8 billion as of January, from $12.5 billion in early 2000.
3 Min Read
SEOUL (Reuters) - A swarm of online traders in South Korea is taking a leaf from the Reddit horde in the United States to quash a government plan to lift a pandemic-imposed ban on short-selling, triggering a rally in the most shorted-stocks such as Celltrion on Monday.
FILE PHOTO: The logo of Celltrion is seen at company s headquarters in Incheon, South Korea, October 28, 2016. REUTERS/Kim Hong-Ji
Almost 30,000 investors of the Korea Stockholders Alliance have come together at a membership-based forum at naver.com, signing online petitions and staging downtown demonstrations calling for permanent ban on short selling of shares.
Posted : 2021-02-01 16:15
Updated : 2021-02-02 09:13
Financial Services Commission Chairman Eun Sung-soo, second from right, fixes his gaze at Anti-Corruption and Civil Rights Commission Chairperson Jeon Hyun-heui during National Policy Committee meeting at the National Assembly on Yeouido, Seoul, Jan. 29. Yonhap
Over 60 % retail investors oppose resumption of short selling
By Lee Kyung-min
The government is expected to extend its short-selling ban for another three months until mid-June, in a move to placate retail investors seeking collective action against what they consider an extremely uneven playing field on the stock market, according to multiple sources, Monday.
The much-politicized financial investment method is being widely used by foreign and institutional investors to make profits after selling borrowed shares at a lowered price in a bear market at the expense of retail investors.
In the U.S., small investors have defied short-sellers by banding together online, renting billboards in Times Square and even flying banners from planes; in Korea, they are driving a bus.