Netflix has its next major action franchise: an adaptation of Keanu Reeves’ new BRZRKR comic book series, which the streaming service is turning into both a live-action film (produced and starring Reeves) and a sequel anime series (with Reeves voicing his character), the company announced today.
BRZRKR is a new 12-issue series from Boom Studios (the first issue of which was released earlier in March) co-written by Reeves himself (in his comics debut) and Matt Kindt (Folklords, Justice League of America) with art by Ron Garney. Fittingly, Reeves will play the title character in both the upcoming live-action series and the anime, although there’s no release date announced yet.
The ultra-violent comic follows an immortal berserker — who coincidentally looks almost exactly like Keanu — over his 80,000 year life, culminating in the present day, where he works for the US government in exchange for help discovering the secrets of his life and how he can finally die. (It’s a similar concept to Netflix’s The Old Guard, which is also based on a popular run of comics and is viewed as another potential franchise for the streaming service.)
Exciting news! Netflix is developing a live action film AND follow-up anime series based on Keanu Reeves’ BRZRKR, a brutally epic saga about an immortal warrior’s 80,000 year fight through the ages. Reeves will produce and star in the film, and voice the anime. pic.twitter.com/RVWEuBCXTJ
— NX (@NXOnNetflix) March 22, 2021
BRZRKR was a massive crowdfunding success (helped in part by Reeves’ involvement), raising nearly $2 million between Kickstarter and additional funding before the first issue even hit shelves. The series has so far sold has over 615,000 copies, making it the second-most sold comic book in the last decade (following Marvel’s Star Wars #1 relaunch in 2015.)
The upcoming adaption fits Netflix’s current strategy perfectly: the streaming service is always hunting for more must-watch content, and particularly for the kinds of shows and movies that can build franchises to rival those of Disney’s Marvel or Star Wars or HBO Max’s Game of Thrones universes. The multimedia method for the project is also part of Netflix’s modern approach, mirroring animated expansions of projects like The Witcher or Zack Snyder’s upcoming Army of the Dead that are planned to help keep viewers invested even after the marquee show or movie has debuted.
It’s also the highest-profile project to come from Netflix’s recent first-look deal with Boom Studios, which gives the streaming service the first shot at adapting comics from the indie publisher.
The makers of the Pfizer/BioNTech coronavirus vaccine are “turning every stone” to scale up production capacity as Europe continues to suffer from a deficit in vaccine supply.
In an exclusive interview with CNN, BioNTech co-founder and chief medical officer Özlem Türeci said the company is “continuously reevaluating how the target we have already set could be even overperformed.”
Despite certain limitations such as the fact that they “cannot train people very fast” the company is focusing on finding partners “who can compliment pieces of this pretty large network” of vaccine supply.
The company is also being kept busy by the continuous need to test the robustness of their vaccine against new variants of the virus.
Based on their analysis the current vaccine has been found to be effective against the variant first detected in the UK and the variant first detected in South Africa, with Türeci stressing that the company’s main priority is ascertaining “which variant is of real concern.”
A great deal of resources are directed into being “prepared for tomorrow in case such a variant of concern would occur: the processes with which we can adapt to a new variant,” Türeci added.
The company uses its “fast and adaptable” mRNA platform to exchange the old sequence against that of the new variant according to Türeci. Blueprint clinical trials whereby the company pre-discusses with regulators the switch in sequence, are also being deployed.
Although emerging variants are something BioNTech has to take “seriously,” Türeci told CNN that there is “no reason for fear currently.”
Türeci also spoke of how a “gender balanced team is one of the key success factors” in BioNTech’s work, boosting in particular the problem solving capabilities of the company.
“As scientists we are used — particularly because we have always worked in technology innovation — we are used to solve problems and unknowns in real time. And that was a strength which helped us along this way.”
The Pfizer/BioNTech vaccine has drawn praise from across the globe for its high effectiveness, with a peer reviewed study in Israel showing an effectiveness rate of 94% in preventing asymptomatic Covid-19.
Last week,Pfizer and BioNTech announced that real-world evidence from the Israel Ministry of Health shows that two weeks after the second dose of the vaccine, its effectiveness was at least 97% in preventing symptomatic disease, hospitalizations and death. The analysis also found that the vaccine effectiveness was 94% in preventing asymptomatic Covid-19, where infections show no symptoms
“When we started our development last year in January, our aim was to make a difference for people worldwide and to help end this pandemic,” Dr. Ugur Sahin, co-founder and CEO of BioNTech, said in the announcement. “One year after the declaration of a pandemic by the WHO, we now see that we are on the right track to accomplish our goals.”
Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally came under pressure last week, with the Nasdaq and speculative growth names hardest hit.
X
Tesla‘s (TSLA) rival Nio (NIO) and Zoom Video Communications (ZM) report earnings Monday, but both big 2020 winners are well off highs, along with Tesla stock itself.
This is a time to be defensive and looking for stocks that are holding up well. Taiwan Semiconductor (TSM), General Motors (GM), RH (RH), Target (TGT) and InMode (INMD) are worth watching to see if they can form proper bases while the market sorts itself out.
The market rally, under pressure, is at a turning point. Regaining key support levels would signal renewed strength. But a Nasdaq break below last week’s low would send a bearish signal.
Tesla stock and Taiwan Semi are on IBD Leaderboard. Tesla and TSM stock are on the IBD 50. RH was Friday’s IBD Stock Of The Day.
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Dow Jones Futures Today
Dow Jones futures will open at 6 p.m. ET Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus cases in the U.S. have hit 29.13 million, with deaths above 523,000.
An advisory panel late Friday recommended that the FDA give emergency approval for the Johnson & Johnson (JNJ) coronavirus vaccine. The FDA is expected to approve the one-shot vaccine promptly. That will provide another shot in the arm for vaccination efforts.
Vaccinations hit a record 2.2 million on Friday.
Stock Market Rally
The stock market rally had a lot of wild intraday swings, with the major indexes finishing with notable decline, near weekly lows.
The Dow Jones Industrial Average fell 1.8% in last week’s stock market trading after hitting a record high Wednesday. The S&P 500 index sank 2.5%. The Nasdaq composite tumbled 4.9%.
The 10-year Treasury yield rose 9% to 1.46% after briefly topping 1.6% on Thursday. While good news for many financials, higher rates weighed on growth stocks.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) tumbled 6.6% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) plunged 7.8%. The iShares Expanded Tech-Software Sector ETF (IGV) slumped 6.8%, with Zoom Video stock a key component. The VanEck Vectors Semiconductor ETF (SMH) fell 5.1%, with TSM stock the top holding.
Reflecting more-speculative story stocks, Ark Innovation ETF plummeted 14.8% and Ark Genomics ETF 13.8%. Tesla stock is the top holding across Ark Invest’s ETFs.
Nio, Zoom Earnings On Tap
Chinese EV maker Nio and videoconferencing leader Zoom Video report earnings late Monday. Nio earnings and delivery forecasts will be closely watched, as competition heats up in China’s EV market. Zoom Video should stream in with another quarter of huge growth, with investors eager for insight into the company’s prospects as we move into a post-pandemic world later this year.
Zoom stock sank 10.5% last week to 45.78, below its 10-week line. Shares did find support at their 200-day moving average Friday. Investors who rode the huge gains in 2020 and are still holding ZM stock might choose to hold strong, but otherwise there are not strong reasons to have a position right now.
Nio stock plunged 17% last week to 373.61, now 16% below its 10-week line. That’s a decisive break and a strong sell signal, especially with earnings on tap. Longtime holders sitting on a huge gain could chose to hold some shares into the earnings report.
As for Tesla stock, the EV leader skidded 13.5% to 675.50. It’s now 14% below its 10-week line. It’s given up roughly half the gains from its powerful November rally. As with Nio, TSLA stock investors likely should have taken at least partial profits by this time.
Stocks To Watch
TSM stock tumbled 7.8% to 125.94 last week, but found support at the 50-day and 10-week moving average, edging higher Friday. In a strong market rally, investors might be looking for a rebound as a buying opportunity. But for now, investors likely should wait for TSM stock to finish a new base as the market sorts itself out.
General Motors sank just 2.4% last week to 51.33, but also found 10-week line support, bouncing slightly higher Friday. It could soon have a new base after hitting a record high in early February.
RH stock retreated 2.9% to 490.37 last week, testing its 50-day and 10-week lines. It has a flat base with a 542.11 buy point.
Target stock fell 2.9% last week to 183.40, below its 50-day and 10-week lines. But it’s still within a flat base with a 200.06 buy point. Target earnings are due Tuesday morning.
InMode stock dipped 0.2% to 68.96 and rose 2.7% on Friday. Shares have traded tightly over the past few weeks after hitting record highs. INMD stock has found support at the 21-day a few times in recent weeks. The relative strength line is right at record highs. INMD stock needs to form a base, but the action has been very strong.
Stock Market Rally Analysis
The major indexes retreated last week, especially the Nasdaq composite. The tech-heavy index tried to regain its 50-day moving average on Friday, but failed to close above it amid heavy selling at the close. Also, volume was much lighter on the up days than the downside.
For much of the week, the stock market rally looked like it might be in a violent sector rotation out of speculative growth and into real economy cyclical names. The Dow Jones hitting a record high on Wednesday provided further evidence.
However, the Dow Jones and S&P 500 fell sharply on Thursday-Friday, barely closing above their 50-day lines.
All the major indexes are below their 21-day exponential moving average. The 21-day line served as support for the Nasdaq during the April-September stock market rally and in the postelection market rally. But in recent days it’s served as resistance.
On the downside, Tuesday’s intraday low for the Nasdaq looms large. That low is essentially at the 13,000 level and the Jan. 29 low. A close below that area would likely mark the end of the current stock market rally. But we’re not there yet.
What You Should Do Now
Investors should be wary of making new buys until the Nasdaq is back above its 21-day line. You should have reduced exposure substantially over the past couple of weeks. If the Nasdaq undercuts and closes below Tuesday’s low, that would be a signal to move further into cash.
Analyze your holdings. Are there stocks you should have sold partially or entirely last week? Which are your long-term bets that you want to hold a core position in?
Even if you’re entirely in cash, it’s important to stay engaged. Work on your watchlists, focusing on high RS stocks like Taiwan Semiconductor and Target.
Check out the Relative Strength At New High list on the IBD Stock Screener. Also use the RS Line At New High and RS Line Blue Dot stock lists on MarketSmith.
Make sure you’re looking at commodity-related plays, financials and other cyclicals.
Review your trades from the past several months. Look at your big winners and losers. Look for stocks that you owned that you sold too soon, missing out on big winners. Identify the chart patterns and the strengths and weaknesses in your trading moves.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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Packs of dogs in eastern Russia are inexplicably turning up pink and blue.
The bizarre phenomenon has occurred in and around the town of Dzerzhinsk, about 242 miles east of Moscow, near the abandoned Dzerzhinskoye Orgsteklo chemical plant that once manufactured highly toxic hydrocyanic acid, which is also a core ingredient in a once commonly used “Prussian blue” dye. Experts believe this detail may help explain why some pups are now blue through-and-through — including their excrement, according to vets.
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Without clearer details, Dmitry Karelkin, head physician of Zoozashchita veterinary hospital, officially blamed the blue hue on “some kind of chemical,” which doesn’t appear to have harmed the animals physically.
Meanwhile, examiners from the Lobachevsky Research Institute of Chemistry at Nizhny Novgorod State University, as well as the Committee for State Veterinary Surveillance, found “no signs of irritating chemical burns,” while results from the blood and stool tests did not reveal significant toxicity.
The blue dogs reportedly will remain under close observation for about 20 days. Meanwhile, no announcements have been made to specifically address pooches that are turning up pink, according to East2West news agency. However, some are calling for an investigation of a chemical dump in another area of Dzerzhinsk, where 300,000 tons of toxic waste was unloaded after the Cold War. The nearby Kristall defense plant was also implicated in local reports.
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East2West has reported that city officials are calling the claims “exaggerated.”
Packs of dogs in eastern Russia are inexplicably turning up pink and blue.
The bizarre phenomenon has occurred in and around the town of Dzerzhinsk, about 242 miles east of Moscow, near the abandoned Dzerzhinskoye Orgsteklo chemical plant that once manufactured highly toxic hydrocyanic acid, which is also a core ingredient in a once commonly used “Prussian blue” dye. Experts believe this detail may help explain why some pups are now blue through-and-through — including their excrement, according to vets.
Without clearer details, Dmitry Karelkin, head physician of Zoozashchita veterinary hospital, officially blamed the blue hue on “some kind of chemical,” which doesn’t appear to have harmed the animals physically.
Meanwhile, examiners from the Lobachevsky Research Institute of Chemistry at Nizhny Novgorod State University, as well as the Committee for State Veterinary Surveillance, found “no signs of irritating chemical burns,” while results from the blood and stool tests did not reveal significant toxicity.
The blue dogs reportedly will remain under close observation for about 20 days. Meanwhile, no announcements have been made to specifically address pooches that are turning up pink, according to East2West news agency. However, some are calling for an investigation of a chemical dump in another area of Dzerzhinsk, where 300,000 tons of toxic waste was unloaded after the Cold War. The nearby Kristall defense plant was also implicated in local reports.
East2West has reported that city officials are calling the claims “exaggerated.”
Dogs also appear to be turning up pink, though officials have yet to comment on why this could be.social media
Sister André has lived through the 1918 flu pandemic, two World Wars and “many sad events,” she once said. As Europe’s oldest known person, she turns 117 on Thursday, and has now accomplished another feat: defeating the coronavirus, with barely any complication.
“She’s recovered, along with all the residents here,” said David Tavella, the spokesman at the Ste. Catherine Labouré nursing home in Toulon, a city in southeastern France, where Sister André resides. “She is calm, very radiant and she is quite looking forward to celebrating her 117th birthday,” he said, adding that the home’s most famous resident was resting on Wednesday and needed a break from interviews.
The coronavirus swept through the nursing home last month, just as nurses began consulting residents about vaccinations; 81 of its 88 residents became infected, including Sister André, and 11 eventually died.
Mr. Tavella said that until last month no case had been detected in the nursing home since the beginning of the pandemic. Still, the outbreak was a stark reminder that the virus has been devastating in places where the most vulnerable reside, even with stringent restrictions that have turned many care homes in the country and elsewhere in Europe into fortresses.
Sister André remained isolated for weeks and felt a bit “patraque,” or off color, Mr. Tavella said, but she blamed the virus and not her age. She slept more than usual, but she prayed and remained asymptomatic. This week, she became the oldest known person to have survived Covid-19.
“She kept telling me, ‘I’m not afraid of Covid because I’m not afraid of dying, so give my vaccine doses to those who need them,’” Mr. Tavella said.
Sister André’s story has made headlines in France, providing some uplifting news in a country where thousands of nursing home residents have died.
France began vaccinating health care workers this week, but the authorities have faced criticism for a sluggish rollout that has so far kept France struggling with a rising number of infections, and no end to restrictions in sight. As of Wednesday, 2.2 million people had been vaccinated, less than 3 percent of the population.
Nursing home managers have restricted visits, or asked relatives to wear gowns, masks, gloves and glasses to protect residents. Many residents have remained isolated for nearly a year, unable to spend Christmas holidays with their families.
Sister André was born Lucile Randon in 1904, and took her ecclesiastical title in 1944 when she joined a Catholic charitable order. Now blind and in a wheelchair, she has at times felt lonely and dependent, she told French news outlets in interviews in recent years, but has accepted the ordeal that the pandemic has brought, Mr. Tavella said.
“When you’ve been an adolescent during a pandemic that killed tens of millions, and seen the horrors of two world wars, you do put things into perspective,” Mr. Tavella added.
Stories of other aging figures going through the pandemic have also provided tales of resilience, despair and hope. In Belgium, Simon Gronowski, a Holocaust survivor, has lifted up his neighbors by playing the piano. In New Jersey, Sylvia Goldsholl defeated the coronavirus last year at age 108 because, she said, she “was determined to survive.”
Tom Moore, the 100-year-old British Army veteran who became a national hero during the pandemic by raising tens of millions of pounds for Britain’s National Health Service, died of the coronavirus last week, prompting countless tributes in the country and beyond.
Mr. Tavella said Sister André remained patient during weeks of isolation although the talkative nun inquired a few times about when she could see people again.
“Sister André didn’t feel the disease, so she wondered a lot why we were talking about the coronavirus every day, why she couldn’t receive visits from us at the nursing home, or from relatives or fellow residents,” Mr. Tavella added.
On Wednesday, most of the nursing home residents were out of isolation, and Sister André was readying herself for her birthday.
She should be quite busy on Thursday. After a call with her family, she will have another one with the mayor of Toulon, before greeting the bishop who is set to visit her.
Then will come the fun part: port wine as a lunch starter, followed by foie gras with hot figs. Sister André will have roasted capon with mushrooms and sweet potatoes as a main course, followed by a two-cheese platter — Roquefort, and goat cheese — and maybe a few glasses of red wine.
And finally, her favorite dessert: a raspberry and peach flavored Baked Alaska. That will come with a glass of Champagne.
Halfway through a bleak winter, Dr. Diane Griffin started to feel something in recent weeks that had been missing for much of the past year: optimism.
Griffin, an infectious disease expert at the Johns Hopkins University School of Medicine in Baltimore, said recent declines in hospitalizations, daily deaths and confirmed new infections were fueling hope that the U.S. has arrived at a turning point in the trajectory of the coronavirus pandemic.
“What we’re seeing is incremental and encouraging,” Griffin said, “but we’re not out of the woods yet.”
More than a year into the pandemic, developments that seem at odds with one another have made it difficult to determine just where the U.S. and the world stand.
Griffin’s optimism is tempered by the fact that while case numbers have been decreasing steadily, they are still much higher than they were during the first wave, which overwhelmed parts of the country last spring and summer. And looming over all the recent progress is the threat of more contagious coronavirus variants that are already spreading rapidly in the U.S. — along with concerns that variants could pose problems for the current round of vaccines.
Scientists say that while it’s heartening to see declines after some of the deadliest and most challenging months of the pandemic, it may be too soon to know whether the U.S. is experiencing a temporary reprieve or whether it is finally starting to get control of the pandemic.
And while some optimism is warranted, the psychological challenges of the pandemic — in which human behavior and collective responsibility remain crucial to keep outbreaks under control — mean communities must remain vigilant.
“We are seeing a dip right now, but I don’t think that changes the thought that we have to be very careful in the weeks ahead,” said Dr. Bruce Y. Lee, a professor of health policy and management at the City University of New York. “Whether this is a momentary dip or whether we reached the peak and now things are coming down — that’s not completely clear.”
Further clouding the forecasts are questions about how the known coronavirus variants, including a more transmissible strain that is thought to have emerged in the U.K., might alter the pandemic’s course.
Some research suggests there’s already cause for concern.
A recent study that was published to the preprint server medRxiv but hasn’t yet been peer-reviewed found that cases of the U.K. variant are doubling in the U.S. every 10 days. The findings seem to confirm a report the Centers for Disease Control and Prevention released last month that projected that the U.K. variant could become the predominant strain in the country by March.
Lee said case numbers are likely to rise again as the U.K. variant becomes more widespread and as other strains that were first reported in South Africa and Brazil circulate in the U.S. But it’s possible that other forces — including increased rates of vaccination across the country, the anticipation that people will spend more time outdoors in the spring and other shifts in behavior — will help counteract a new surge and prevent another wave of runaway outbreaks.
“It was expected that January and February were going to be tough months, because of winter and because of the holidays, but by March or April, we may start to see things improving,” Lee said.
For one, spring will bring warmer temperatures to much of the country, making it easier to spend time outdoors, where the risk of infection is thought to be lower.
And improvements are likely to continue as more Americans are vaccinated, Griffin said.
Early results from Israel, where more than a third of the population has received at least the first of two vaccine doses, provide the first real-time glimpses that efforts to administer shots rapidly and widely appear to be working. Preliminary analyses show that the vaccines appear to be contributing to sharp declines in infections and illness, particularly in people over age 60, who were among the first to get the shots.
Israel has administered more than 60 doses of either the Moderna or the Pfizer-BioNTech vaccine for every 100 residents, far outpacing every other country. (Israel’s vaccine strategy has come under fire for excluding Palestinians.)
Figures released last week by Israel’s Health Ministry indicated that out of nearly 750,000 people over 60 who were fully vaccinated, only 0.07 percent, or 531 people, tested positive for the virus. Of that group, 38 people were hospitalized for moderate or severe illness.
Griffin said the early results from Israel’s vaccine program were “very encouraging,” adding that vaccines could at least stave off serious disease and deaths in the U.S., even if the variants cause an overall rise in cases.
The rollout of vaccines in the U.S. was hampered early on by supply constraints and a lack of overall strategy during the Trump administration. Since then, the federal government under President Joe Biden has been trying to ease bottlenecks in manufacturing and distribution, and it is expanding how and where vaccinations can be administered. The efforts are part of Biden’s goal of giving at least 100 million shots in his first 100 days in office. As of Sunday, the U.S. had administered 40 million doses, according to the CDC.
Experts have said the U.S. is in a race against time to vaccinate as many people as possible before more troublesome variants emerge, but there are ways to mitigate outbreaks even as people wait to become eligible for the shots, said Carl Bergstrom, a professor of biology at the University of Washington.
“Throughout the course of the pandemic, one of the most important drivers has been changes in our collective behavior,” Bergstrom said. “That’s what makes modeling the long-term trajectory of the pandemic so extraordinarily difficult.”
“Throughout the course of the pandemic, one of the most important drivers has been changes in our collective behavior.”
Carl Bergstrom, professor of biology at the University of Washington
Indeed, behavioral changes have at times been associated both with spikes in cases, as people adopted more lax attitudes and states rolled back restrictions, and with valleys, as new measures were put in place and people became more vigilant.
The dynamic was largely to blame for the alarming surge in cases, hospitalizations and deaths in Los Angeles County, California, in December and January.
To avoid another spike in the spring, the U.S. has to stay aggressive with vaccinations and mitigation tactics, such as mask-wearing and social distancing, Bergstrom said. These strategies are even more crucial to combat more transmissible variants of the coronavirus, he said. The U.K. strain has already been reported in more than half of the states, but as in the U.K., the numbers could increase rapidly.
“That’s just how exponential growth works,” Bergstrom said. “It comes in at a low frequency, and the first few doublings you don’t really notice because it’s overwhelmed by what you’re seeing with the regular strain. But when it shifts, it shifts quite suddenly, and then you really see it take off.”
That prospect is why many experts approach the recent declines with cautious optimism. Also of concern is the possibility that progress could be wiped out if a strain emerges that evades the current vaccines. Some early research has already shown that the Moderna and the Pfizer-BioNTech vaccines are less effective against the South African variant, although levels of neutralizing antibodies are expected to still be protective.
It’s also possible, Bergstrom said, that other problematic variants are already circulating in the U.S. undetected.
All of those factors combine to make it difficult to assess where the U.S. stands and to predict how the coming months could play out, he said.
“There are so many moving parts, and it’s so complicated,” Bergstrom said, “but whatever we can do to stay aggressive, the more people we can get vaccinated and the longer we can hang in there, the more we can stave off a huge spring spike.”
GameStop’s and AMC’s stocks have spiked in recent days. Here’s what’s going on.
Sarah Tew/CNET
Wall Street investors have been betting that struggling video game retailer GameStop would fail for a long time. But over the past few months, a bunch of Reddit users have been pushing up the value of GameStop shares instead. At first, it was because they believed the company was better off than the Wall Street doubters believed. But as GameStop value has soared, Wall Street’s bad bets have cost the investors billions of dollars.
Now, the Reddit users are in it to win an epic battle against Wall Street too.
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At one point, the Reddit users from the forum r/WallStreetBets have sent the stock up more than 14,300% (you read that right), though it’s gone through wild fluctuations. They’ve spread their strategy to struggling movie chain AMC, too. In their wake, these online market players have upended Wall Street, creating a drama filled with memes, app trading disasters and weird internet lingo as big-time investors have lost billions of dollars.
It’s a crazy story, complete with cameos by Tesla CEO Elon Musk and CNBC financial commentator and former hedge fund manager Jim Cramer. There’s even Michael Burry, one of the subjects of the book and movie The Big Short, who happens to be a prominent investor in GameStop.
Even Silicon Valley found a way to get in the middle of this mess. It’s wild.
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Despite the move being characterized as “insane” and a “Ponzi scheme,” GameStop’s stock has become the battleground of a war between Wall Street and internet traders, with nearly all of them expecting it to fail. The questions are when, and who will be on the losing end.
“We’re seeing a phenomenon that I have never seen,” Jim Cramer, a Wall Street commentator on CNBC and a former hedge fund manager, said during a segment Monday. And GameStop could be just the start. “It’s insane.”
It all started last week, when posters on the Reddit stock trading chat community r/WallStreetBets pushed up shares in the struggling game retailer. With much of Wall Street betting against GameStop’s success, WallStreetBets investors believed they could force a market rally by creating demand where there had been little before.
As a result, GameStop stock jumped more than 822%, from $17.25 per share at the beginning of the year to a high of $159.18 on Monday. Then it dropped by nearly half, only to rise back up to $147.98 on Tuesday. And then Musk tweeted about it to his 43 million followers (using that weird internet vocabulary, of course), and the price jumped 40% in after-hours trading. On Wednesday, it closed at $347.51 per share, before dropping again in after-hours trading.
On Thursday, it jumped even higher, to $483 per share, before halving again. Amid all the chaos, the New York Stock Exchange temporarily halted GameStop share trading more than a dozen times before midday Thursday. It ended the normal trading day down 44% to $193.60, only to jump back
The Reddit community has also turned its eyes on BlackBerry, attempting to pull the same trick. So far, they’ve pushed shares up more than double from $6.58 per share, where they started at the beginning of the year. On Tuesday, the stock closed at $18.92. On Wednesday, it closed regular trading at $25.10, though it’s fallen since then to $14.65.
There’s also AMC. Reddit targeted that one, spawning the hashtag #SaveAMC on Twitter too. Its stock jumped from $2 per share last week to close trading at $19.90 on Wednesday. It too fell in after-hours trades, and after jumping on Thursday, fell again to close at $8.63.
App-based traders Robinhood, TD Ameritrade and WeBull responded to the fluctuations by restricting trades of GameStop, AMC and other fast-moving stocks on their services.
Robinhood drew particular ire, leading US Reps. Rashida Tlaib and Alexandria Ocasio-Cortez, as well as Sen. Ted Cruz, to criticize its decision. At least one class action lawsuit has been filed already too.
It’s a lot to take in. So, here’s what you really need to know about GameStop, AMC and Wall Street.
How’d this happen?
GameStop is one of the largest video game retailers in the world, but it’s struggled to remain relevant in the age of online sales.
Effectively, the WallStreetBets crowd realized Wall Street made a huge mistake. People known as short sellers who were betting GameStop stock would fall had been too aggressive.
The WallStreetBets crowd understood that if they could create artificial demand for GameStop shares with their own money, they could force Wall Street to recalibrate its bets, pushing prices even higher. And some investors who couldn’t even back up their bets against GameStop, would have to pay even more.
As of Wednesday, there were 3.8 million members of the WallStreetBets community, though it’s nearly impossible to determine how many people are involved in the GameStop, AMC and BlackBerry schemes.
What we do know is that all this activity appears to have created a “short squeeze,” where the short sellers betting against GameStop are being forced to buy more GameStop stock to cover their losses. That pushed the price up even more, which forces more short sellers to cover their losses, which pushes the price up even more. Some of the Reddit crowd believe that GameStop stock could reach into the thousands of dollars just because of this mechanism.
And that’s why we’re suddenly seeing GameStop’s value jump.
See also: GameStop’s stock spike fueled by slang from Reddit’s WallStreetBets community. Here’s what it means
How does this short selling work?
When people buy a stock normally, they’re betting it’ll rise or share enough profits that they’ll make more money than they put in.
Short sellers, or “shorts,” do the opposite. Shorts trade with borrowed shares and sell them, with hopes they can make money if the stock falls in the future.
Imagine Ian Corp. is a public company, and its shares are worth $10. A “short” would borrow shares of Ian Corp. and sell them for $10. Their bet is that Ian Corp. stock will actually drop below that — maybe to $4. If it does, then, they can buy the shares at $4 and pocket the other $6.
If Ian Corp. stock jumps to $25, then the lender who made this bet possible may push the short to cover their bet. That would mean the short effectively has to buy the shares at the new, higher price.
When a short is right, betting against a company, they can make a lot of money. But if they’re wrong, they can lose a lot more money too.
There are other options and tools to bet against a company’s future as well.
GameStop stock from Jan. 19 to Jan. 25.
Google Finance
How much money did the GameStop shorts lose?
The losses appear to be tremendous. As of Wednesday, shorts seemed to have lost $5 billion betting against GameStop this year, according to Investopedia. About $1.6 billion, or about half, of those losses happened on Friday when the stock jumped 51%.
It’s also worth noting that GameStop began the year as one of the most shorted companies on the market.
That seems like a lot of money
It is, but what’s perhaps an even bigger indication of how dramatic these moves were, GameStop share sales were halted during Monday’s trading because they were moving too fast.
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These wild swings won’t continue forever, will they?
Part of what’s driven this behavior is the popularity of retail investing, or when traders who aren’t Wall Street professionals buy and sell stocks. Stock trading apps, often with no fees, have made it easy for people to jump into the market. And social media has helped people to rally together, egging one another on to buy more and more of a stock.
“GameStop’s rally is one in a series of eye-catching market moves to stir concerns among fund managers, some of whom say trading by individual investors is pushing stock prices out of whack with fundamentals,” the Wall Street Journal wrote Monday.
How’s Wall Street responding?
Big name trading apps like Robinhood, ETrade and others have reportedly struggled to remain online amid all the hysteria. TD Ameritrade on Wednesday acted to restrict the sudden spikes in demand, “out of an abundance of caution amid unprecedented market conditions.”
Robinhood has also come under particular scrutiny for appearing to severely restrict trades of some stocks while the market was wildly fluctuating Thursday. Politicians on both sides of the aisle in the US have called for an investigation into the app maker. Meanwhile, many angry Redditors say they’ll stop using Robinhood. Some have even threatened to join a class action lawsuit.
Nasdaq said it will halt trading on a stock if it finds a link to unusual activity on social media. The company said it sees its role as a “self-regulatory organization” is to make sure its markets act in a “legitimate” way. “Regulators kind of have to catch up with the technology that’s now available,” Nasdaq CEO Adena Friedman told CNBC on Wednesday.
Throughout the past week, the markets have temporarily halted trades of GameStop and AMC stocks in particular because of the wide price swings and heavy volume.
What do the companies think of all this?
GameStop didn’t respond to a request for comment. BlackBerry executives told MarketWatch it was “not aware” of any reason for the recent trading activity. BlackBerry did reach a settlement with Facebook earlier this month over a patent fight, though the terms were not disclosed.
Why are the Redditors doing this?
There’s the seeming easy money aspect, which is compelling in and of itself if you’re that comfortable with risk. But some of them are also framing this as a crusade against Wall Street. “We’re in a war,” one Redditor posted Wednesday. “A war for the redistribution of wealth.”
You promised me Elon Musk, how’s he involved?
Aside from being a prolific Twitter user, Musk has also recently learned he can drive people to various companies’ stocks. He tweeted about how much he enjoyed buying something for his dog off Etsy, and the stock jumped. Now he’s tweeted about GameStop, stirring up more frenzy.
This sounds nuts
It is. And just watching it is enough to make your head spin. For example, on Wednesday evening, the popular chat app Discord banned the WallStreetBets community from its service for violating its rules against hate speech and glorification of violence. Apparently, some of the nastier elements of the community had repeatedly broken Discord’s rules.
Around the same time, the group in charge of the WallStreetBets Reddit community locked out anyone else who might be interested in joining, effectively making it all private.
That appeared to spook investors, who suddenly sent GameStop and AMC stock diving more than 30% each in after-hours trading.
A little over an hour later, the Reddit community was publicly available again, denizens had created a new Discord chat group, and GameStop and AMC stocks were recovering from their sudden slumps. If you’d put down your phone to watch a movie before it happened, you might never have noticed by the time it was done.
Except you may have seen Elon Musk tweeted about how Discord wasn’t cool anymore.
OK, and what about The Big Short guy?
Michael Burry is an interesting subject himself. He became famous for betting against the housing market before the great recession kicked in around 2007 and 2008. He’d invested in GameStop, but also said he believed all this behavior was “unnatural, insane and dangerous.”
Of course, some of the Reddit members say they see this battle over GameStop as their Michael Burry moment, making it all that much more interesting.
Should I try to get in on the frenzy?
It’s always smart to consult a financial professional before making investing decisions.
Correction Jan. 25 at 5:52 p.m. PT: Fixed the explanation of short selling to make clear how the process works and that there are different ways to bet against a company’s stock price rising.
In 2013, the lives of millions of sea stars were mysteriously extinguished. Limbs that were once strong, probing arms searching for sustenance, shrivelled and tore themselves away from the rest of their bodies and melted into a sickly goo.
“There were arms everywhere,” ecologist Drew Harvell told The Atlantic‘s Ed Yong last year. “It looked like a blast zone.”
The dismal remains of these animals, who are usually capable of regenerating their own limbs, were strewn along the entire West Coast of North America, in one of the largest mass wildlife mortality events ever recorded. Over 20 species of sea stars were perishing.
In some areas, sunflower star (Pycnopodia helianthoides) populations dropped by an average of around 90 percent in weeks, a loss that saw this once common and abundant species vanish from most of its range in just a few years.
The culprit causing this sea star wasting (SSW) even got to starfish in captivity, killing individual animals within days.
Leg of Pisaster ochraceus disintegrating from sea star wasting syndrome. (Elizabeth Cerny-Chipman/Oregon State University/CC BY-SA 2.0)
This led scientists to suspect some sort of pathogen, like a virus or bacterium, was infecting these stunning sea creatures. However, subsequent studies exonerated the lead viral suspect.
Meanwhile, more sea star deaths followed around the globe, including half a world away in Port Phillip Bay, Australia.
Now, San Francisco State University marine biologist Citlalli Aquino and colleagues have finally unravelled the mystery, showing something much more complicated was going on.
By comparing the types of bacteria within healthy sea stars and those suffering from the wasting disease, the researchers found bacteria that thrive in low oxygen environments were abundant in the sick animals, as were copiotrophs – bacteria that like high-nutrient environments.
Experiments back in the lab confirmed that depleting water of oxygen caused tissue-melting lesions in 75 percent of sea stars. Adding excess nutrients or phytoplankton to the water also caused the sea star’s health to decline.
Re-analysing tissue samples from the 2013 event, the researchers detected excess nitrogen – a sign these animals suffocated to death.
“Sea stars diffuse oxygen over their outer surface through little structures called papulae, or skin gills,” explained Cornell University marine microbiologist Ian Hewson. “If there is not enough oxygen surrounding the papulae, the starfish can’t breathe.”
These microorganisms aren’t directly causing disease, but stealing the sea stars’ oxygen supply when increased levels of organic matter are triggering the microbes to bloom. As a result, the sea stars literally drown in their own environment. Then their decaying bodies further increase nutrients for the microbes, creating a horrible feedback loop of sea star death.
Aquino and team noted most SSW events are reported in late fall or summer, when phytoplankton that increase levels of nutrients in the water via photosynthesis are more abundant.
Warmer temperatures are known drivers of phytoplankton blooms, and the sea star wasting event in Australia followed the longest and most intense heat wave on record. Sea star wasting events elsewhere have also followed increased sea temperatures.
“Warmer waters can’t have as much oxygen [compared with colder water] just by physics alone,” Hewson told Erin Garcia de Jesus at Science News.
None of this bodes well for our future on a warming planet.
University of Vermont biologist Melissa Pespeni, who was not involved in the study, told Science News this complicated tangle of biological and environmental factors is “a new kind of idea for [disease] transmission.”
Devastating repercussions from the loss of these precious stars of the sea have already echoed out across entire ecosystems. The sunflower star is a voracious predator with up to 24 arms that span as far as 1 metre (3.3 ft), feeling their way across the seafloor for sea urchins, snails, and other invertebrates to devour.
Without the sunflower and other sea stars keeping sea urchins in check, these herbivores are eating their way through giant kelp forests. By 2016, sea urchins had already reduced kelp populations by 80 percent in some areas, decimating these once thriving underwater forests.
“This is a very clear example of a trophic cascade, which is an ecological domino effect triggered by changes at the end of a food chain,” said Simon Fraser University marine ecologist Isabelle Côté, who investigated the environmental aftermath last year.
“It’s a stark reminder that everything is connected to everything else.”
This research was published in Frontiers in Microbiology.
