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Investors trading in meme stocks spent Wednesday looking a lot of red.
The unofficial memes stock index picked up a consistent pace on Wednesday, with the big names dropping significantly, and even a rotation from memes to clean energy names appeared to slow as retail investors found themselves playing games. an uneventful game of Whack-a-Mole trying to find heavily shorted stocks to play for squeezes.
But while the trade was lousy, retail investors took a macro thrill in signs that the legal waters are turning rough for their old nemesis Robinhood HOOD,
Ur-memes like GameStop GME,
AMC Entertainment AMC,
Blackberry BB,
and Koss KOSS,
all closed to continue a rough weekly trend, and even new names like Clean Energy Fuels Corp CLNE,
and Canoo GOEV,
couldn’t benefit from what appeared to be the start of the week’s momentum from even stock traders dipping into renewable and green energy names.
But one name has managed to capitalize on this trend that still barely breathes.
IEC Energy Camber,
closed up 6.2% after jumping over 30% at the start of the session. Camber, which has seen a massive surge in interest from retail traders on WallStreetBets, according to data from HypeEquity, also started the day as one of the most heavily shorted stocks in the market.
According to a research note from Fintel, “Short-term interest in Camber rose from 6.1 million shares as of August 31 to 24.4 million shares on September 15, a colossal jump of 298%. “
For Camber, the old chemistry of short-term interest and high social media interest combined to give the natural gas company great energy for memes on Wednesday.
This was not true for other heavily abbreviated names, however. Katapult Holdings Inc. KPLT,
fell by 5%, e-commerce plays Aterian ATER,
fell 12.4%, and Vinco Ventures BBIG,
fell 3.2%.
Even Warby Parker WRBY, darling of the newly listed hipster glasses,
failed to gain steam, giving up a noon push to close at just 0.8%.
But all was not gloomy and dreary on Reddit boards Wednesday, thanks to more potential legal schadenfreude from the Robinhood headquarters.
In another class action lawsuit filed on behalf of retail traders regarding the commission-free trading app’s decision to stop trading in stocks even on January 28, at the height of the chaotic short squeeze, it was alleged that Robinhood’s internal communications seem to indicate that the company’s COO was unloading his shares into AMC just days before the app restricted trading in the shares.
According to the file, Jim Swartwout told his colleagues via an internal chat on January 26, “I sold my AMC today.”
He went on to warn his fellow Robinhood that “FYI – tomorrow morning we move GME to 100% – so you know,” apparently referring to the margin costs Robinhood would pay to own the super volatile stocks on January 27, a full day before the decision to restrict access is made.
On January 28, the company restricted trading in both stocks and others, after realizing it could no longer risk the margin costs.
The move would have potentially shielded Swartwout from losses on AMC stocks which had jumped nearly 900% this month, but would fall 56% in the following days after Robinhood cut off access to its platform.
The lawsuit was circulating widely on Wednesday afternoon, prompting a wave of subreddits dedicated to speculating on Swartwout’s personal stock trades and a flurry of tweets casting suspicion on the alleged stock trades, and using them as yet more potential evidence to prove that the anti-retail bickering was a very real phenomenon at the height of the January crisis.
Neither Swartwout nor Robinhood responded to comment on the lawsuit.
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