Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets, as well as what to expect in the coming weeks. Here’s what’s on the docket:
No, this is not the beginning of a bad finance joke. It’s the actual collection of individuals grilled by Congress on Thursday in a high-profile display of political theater the stock market has rarely experienced before.
Gabe Plotkin – the famed hedge funder who took home $846 million in 2020, then took a massive bath on his GameStop short last month – was asked with a straight face if he’s a registered broker. He was later asked if he thought short-selling constituted market manipulation, to which he replied “no” (presumably because it doesn’t). Nobody pronounced Vlad Tenev’s last name right for five straight hours. Keith Gill (known on YouTube as Roaring Kitty) was mostly ignored. It was nobody’s idea of a productive time.
But the sheer fact that the hearing happened at all shows that the Reddit-based day-trader community has everyone’s attention, and isn’t going anywhere. So what comes next? Despite his lack of air time on Thursday, Gill is still facing significant legal hurdles. Robinhood still has many questions to answer about its operations, its role in “inciting” reckless trading, and just how much money it has under management – not to mention that IPO it’s been planning. And only when first-quarter hedge filings start to trickle out will we get a full idea of who won and lost during the whole ordeal.
Outside of Reddit mania, the press for more stimulus continued. The timeline for Biden’s $1.9 trillion package is looking like mid-March now, and there’s still considerable haggling over what exactly will be included. On the economics front, debate is waging over inflation, and whether the sudden fiscal injection will cause prices to overheat. If that happens, it could mean bad news for the Reddit traders riding high on momentum stocks right now – and perhaps an opportunity for a short-seller redemption.
Tom Finke is the former CEO of the $345 billion asset manager Barings and a board member of Invesco. He and his partner recently raised $115 million via their SPAC Adara Acquisition Corp. (ADRA). Finke breaks down why he is jumping on the SPAC bandwagon and shares what to look for in SPACs.
