Chamath Palihapitiya Says He Exited GameStop Long Position Tech investor Chamath Palihapitiya says he exited a long position in GameStop, apparently via options, earning hundreds of thousands of dollars. He'll donate the proceeds.
Palihapitiya told CNBC Wednesday, “I ended up closing out my position this morning, and I wanted to announce that I’m taking all the profits that I made plus my original position — I’m going to take $500,000, and I’m going to donate it.”
The short squeeze for multiple companies with poor fundamentals began on Friday when Andrew Left, managing partner of short seller Citron, said it was abandoning GameStop because of harassment from bulls.
Before and after his remarks, retail investors have been buying shares of the videogame retailer like there’s no tomorrow.
Billionaire investor Chamath Palihapitiya on GameStop surge and rise of retail investors
The stock market showed sharp losses Friday afternoon as leading growth stocks got taken to the woodshed again. Apple (AAPL) lagged badly in the Dow Jones Industrial Average despite a bullish earnings report earlier in the week.
The stock market moved off lows in late-afternoon, but the major stock indexes were still mired in red. The Nasdaq composite was down 1.5% in late trading, just below its 21-day exponential moving average. The 21-day line has been a consistent support level for the index since the Nasdaq's follow-through day in early November. The S&P 500 gave back 1.6% and was holding just above its 50-day moving average. The Dow Jones Industrial Average fell below its 50-day line as it tries to make a stand at the 30,000 level. The blue-chip index gave back 1.4%.
Johnson & Johnson (JNJ) also lagged in the Dow Jones today after the company said its coronavirus vaccine was 72% effective in the U.S. But it was only 66% effective in Latin America and 57% in South Africa.
Novavax (NVAX) was a coronavirus vaccine winner. Late Thursday, the company said its coronavirus vaccine is 89.3% effective in a late-stage trial in the U.K. It was 95.6% effective vs. the original coronavirus strain. Novavax gapped up to a new high, rising 63%.
Dow Jones Movers Apple stock was down 4%. Shares are down 5% so far this week even after the company on Wednesday reported double-digit revenue growth in all of its product categories on Wednesday.
Caterpillar (CAT), Honeywell (HON) and Chevron (CVX) traded lower in the Dow Jones after reporting earnings. Caterpillar is testing support at its 50-day moving average. Honeywell gave up the 200 level, while Chevron is testing its 200-day line.
Meanwhile, the speculative crazed continued in bitcoin as well as Reddit-fueled stocks like GameStop (GME) and AMC Entertainment (AMC). Bitcoin was off highs but still rallied 8% after Tesla CEO Elon Musk added #bitcoin to his Twitter profile.
Grayscale Bitcoin (GBTC) was off well off highs but still rose 1%. Shares are flat so far this week as GBTC makes a solid test of the 10-week moving average.
After making a nice stand at its 21-day exponential moving average Thursday, Tesla (TSLA) gave up the support level Friday, falling 6%.
After seeing dramatic price increases over the past 12 months, three ETNs covering the FANG stocks and their peers are set to undergo forward splits effective Feb. 12. The $212 million MicroSectors FANG+ Index 2X Leveraged ETNs due January 8, 2038 (FNGO) will undergo a 5-for-1 split, while the $71 million MicroSectors FANG+ ETNs due January 8, 2038 (FNGS) will undergo a 4-for-1 split. The $1.5 billion MicroSectors FANG+ Index 3X Leveraged ETNs due January 8, 2038 (FNGU) will undergo a 10-for-1 split.
Splits were also announced for other ETFs in the future, including five funds offered by Direxion. Those splits are effective March 1:
The Direxion Daily S&P 500 High Beta Bull 3x Shares (HIBL) will undergo a 7-for-1 forward split.
The Direxion Daily Technology Bull 3X Shares (TECL) will undego a 10-for-1 forward split.
The Direxion Daily Semiconductor Bull 3X Shares (SOXL) will undergo a 15-for-1 forward split.
The Direxion Daily Financial Bear 3X Shares (FAZ) will undergo a 1-for-8 reverse split.
The Direxion Daily Small Cap Bear 3X Shares (TZA) will undergo a 1-for-8 reverse split.
And on March 15, DBX Advisors is expected to propose for board approval a 5-to-4 forward split for the Xtrackers USD High Yield Corporate Bond ETF (HYLB).
Expense Ratio Changes
Meanwhile, all 11 of the Select Sector SPDR ETFs saw their expense ratios reduced from 0.13% to 0.12% as of Jan. 31. The affected funds are as follows:
Materials Select Sector SPDR Fund (XLB)
Communication Services Select Sector SPDR Fund (XLC)
Energy Select Sector SPDR Fund (XLE)
Financial Select Sector SPDR Fund (XLF)
Industrial Select Sector SPDR Fund (XLI)
Technology Select Sector SPDR Fund (XLK)
Consumer Staples Select Sector SPDR Fund (XLP)
Real Estate Select Sector SPDR Fund (XLRE)
Utilities Select Sector SPDR Fund (XLU)
Health Care Select Sector SPDR Fund (XLV)
Consumer Discretionary Select Sector SPDR Fund (XLY)
Name & Index Changes
The week also saw a couple of name or index changes taking effect. On Feb. 1, the Global X YieldCo & Renewable Energy Income ETF (YLCO) changed its name to the Global X Renewable Energy Producers ETF and its index from the Indxx YieldCo & Renewable Energy Income Index to the Indxx Renewable Energy Producers Index. Its ticker changed to RNRG.
On Feb. 5, the ERShares Entrepreneur 30 ETF (ENTR) changed its name to the ERShares Entrepreneurs ETF and the ERShares Non-US Small Cap ETF (ERSX) changed its name to the ERShares NextGen Entrepreneurs ETF.
Additional Launches
Several products launched during the week beyond what ETF.com was able to cover. On Feb. 3, AdvisorShares rolled out the actively managed AdvisorShares Alpha DNA Equity Sentiment ETF (SENT) with an expense ratio of 1.12%.
On Friday, Feb. 5, UBS rolled out another seven 2x leveraged ETNs. They are as follows:
ETRACS 2x Leveraged US Value Factor TR ETN (IWDL)
ETRACS 2x Leveraged US Growth Factor TR ETN (IWFL)
ETRACS 2x Leveraged US Size Factor TR ETN (IWML)
ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN (MTUL)
ETRACS 2x Leveraged MSCI US Quality Factor TR ETN (QULL)
ETRACS 2x Leveraged US Dividend Factor TR ETN (SCDL)
Nike Faces China Backlash and Tencent Music Entertainment (TME) crashed 27%,
plunging below its recent buy point and then its 50-day line. It was a bad day for China stocks, with Nio (NIO), JD.com (JD) and Tencent stock falling 10%, 5.3% and 5.1% respectively. Tencent Music's parent, Tencent (TCEHY) topped earnings views early Wednesday. Vipshop (VIPS), which had been far above any buy point, plummeted 21%.
China has proposed requiring internet firms to house their customer data in a government joint venture. China's central bank also is reducing liquidity boosts, a drag on stocks.
Highly valued growth stocks outside of China also were notable losers. Tesla (TSLA) fell 4.8%, continuing to slide from its short-term highs and key moving averages. CEO Elon Musk said early Wednesday that people can now buy a Tesla with Bitcoin, which fueled a brief morning rise in TSLA stock and the Bitcoin price. But Bitcoin also reversed lower.
Investors are always looking for opportunities to profit from the most heavily shorted stocks on the stock market. Here are the stocks on the market with the highest short interest including Gamestop, GSX Techedu Inc, Viacom CBS Inc, Sunrun Inc, and Iron Mountain Inc.
1. GameStop Corp- 20.36%
GameStop Corp (NYSE: GME) is an American retail store that offers video games, electronics, and gaming merchandise. Gamestop Corp's stock has shot up over the past few months as investors have continued to purchase shares at a high-rate. GameStop has been performing well and their sales are up 175% so far this quarter compared to last year.
2. GSX Techedu Inc- 18.98%
GSX Techedu Inc (NYSE: GSX) is a technology-driven education company that provides online tutoring and foreign language classes online. They are a respected educational institution in China that strives to improve teaching, delivery and student learning experiences. GSX Techedu is down 16% this week and their market cap is set at 17.49 billion.
3. ViacomCBS Inc- 17%
ViacomCBS Inc (NASDAQ: VIAC) provides premium entertainment content that connects billions of people all around the world. They use their platforms to connect the world, create culture, and mark important moments in history. On Wednesday their stock was down 23% and the company's momentum seems to be slowing down this week.
4. Sunrun Inc- 13.69%
Sunrun Inc (NASDAQ: RUN) is the leading home solar panel and battery storage company that is headquartered in San Francisco, California. Sunrun powers the homes of hundreds of thousands of customers and provides them with renewable energy each month. Their stock dropped by around 5% in the premarket after announcing they are seeking to raise $3 billion from stock offerings.
5. Iron Mountain Inc- 12.62%
Iron Mountain Inc (NASDAQ: IRM) is an enterprise information management company that is headquartered in Boston, Massachusetts. They offer solutions such as record management, data backup and recovery, and secure shredding. Iron Mountain Inc has been trading well this week and their revenue is up 556.26%.
Baidu, Tencent in U.S. extend slide after SEC actions amid U.S.-China tension BY Reuters — 3:43 PM ET 03/26/2021 NEW YORK (Reuters) - U.S.-listed shares of China based Baidu Inc and Tencent Music Entertainment group (TME) plunged this week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday's closing levels.
They initially fell in tandem with a broad sell-off of tech and tech-related shares on Wednesday, when the Nasdaq shed more than 2%. They extended losses on Thursday after the U.S. Securities and Exchange Commission (SEC) adopted measures to remove foreign from U.S. exchanges if they failed to comply with U.S. accounting standards.
The regulator's move comes at a time of heightened tensions between the world's two largest economies.
Talks last week between U.S. and Chinese officials in Alaska culminated in U.S. sanctions being announced against Chinese officials over alleged crimes against humanity and genocide on Uighurs in Xinjiang.
Baidu stock was last down 4.7%, while Tencent had lost 9.6% on the day.
On Friday, traders said Goldman Sachs Group offered a block of 10 million Baidu shares and 50 million Tencent shares, according to a Bloomberg report.
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