This week markets were fixated by an astronomical run-up in shares of GameStop Corp., which at one point were up 2,000% in less than a month. Much of the moonshot was driven by retail investors, who used online forums like Reddit's WallStreetBets to organize a concerted push at the expense of hedge funds like Melvin Capital Management LP. Now, the White House is monitoring the situation. Congress is planning a hearing on it. Federal Reserve Chair Jerome Powell has been asked about the whole saga. Hedge fund losses ran into the billions. U.S. securities regulator says it's watching the drama. GameStop even almost brought Ted Cruz and Alexandria Ocasio-Cortez together.
In a move that could turn WeWork into a publicly traded company more than a year after its IPO fail, the office leasing company is in talks to combine with a SPAC, WSJ reports. A deal could value the firm at $10B, but it's not known whether that amount includes debt assumed. Bill Ackman, whose Pershing Square Tontine Holdings raised $4B last year, has pointed out that failed IPOs like WeWork is the reason he chose to form a SPAC, but the company has also received offers for private investment rounds and could choose to stay private instead.
Robinhood raised $1 billion overnight from investors to shore up its balance sheet as the brokerage app was set to ease restrictions in the trading of certain volatile stocks. The money raised was on top of $500 million the broker accessed through credit lines to ensure it had the capital required to keep allowing its clients to trade stocks like GameStop and AMC Entertainment. Robinhood CEO Vlad Tenev told CNBC that tapping the credit lines was a proactive measure and denied it was because of a liquidity issue.
With Northwest Quadrant Wealth Management a Registered Investment Advisor I am Josh Fenili.