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GameStop Day Traders Are Moving Into SPACs

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Special-purpose acquisition companies—shell companies planning to merge with private firms to take them public—are rising more than 6% on average on their first day of trading in 2021, up from last year’s figure of 1.6%, according to University of Florida finance professor

Jay Ritter.

Before 2020, trading in SPACs was muted when they made their debut on public markets.

Now, shares of blank-check companies almost always go up. The last 140 SPACs to go public have either logged gains or ended flat on their opening day of trading, per a Dow Jones Market Data analysis of trading in blank-check companies through Thursday. One hundred and seventeen in a row have risen in their first week. The gains tend to continue, on average generating bigger returns going out to a few months.

The gains in companies that don’t yet have any underlying business underscore the wave of speculation in today’s markets. Merging with a SPAC has become a popular way for startups in buzzy sectors to go public and take advantage of investor enthusiasm for futuristic themes.

But lately, day traders are even putting money into SPACs before they have revealed what company they are buying. At that stage, they are pools of cash, so investors are wagering that the company will eventually complete an attractive deal.

Despite the risks, many are embracing the trade, underscoring how online investing platforms and social-media groups now send individuals flocking to new corners of markets, including shares of unprofitable companies such as GameStop and

AMC Entertainment Holdings Inc.

AMC 53.65%

That trend also is playing out in everything from shares of silver miners to SPACs, which were relatively rare before last year but are suddenly ubiquitous in finance.

“I would just have a bad case of FOMO if I wasn’t in SPACs,” said

Marco Prieto,

a 23-year-old real-estate agent living in Tucson, Ariz., referring to the fear of missing out that is driving many individuals to put money into markets.

He has a roughly $50,000 portfolio and about 60% of his holdings tied to blank-check companies. Some of his positions are early on in shell firms such as

Social Capital Hedosophia Holdings Corp. VI,

while others are based on rumors tied to possible deals by companies including

Churchill Capital Corp. IV.

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Shares of that company have more than doubled since Bloomberg News reported on Jan. 11 that it is in talks to combine with electric-car firm Lucid Motors Inc. Trading got so frenzied that the SPAC put out a statement a week later saying it wouldn’t comment on the report and that it is always evaluating a number of possible deals. The stock has still been gyrating in the days since.

Investors betting on SPACs even before such reports is extraordinary because the underlying value of a blank-check firm before it pursues a deal is the amount of money it raises for a public listing. That figure is typically pegged at $10 a share. Still, it has become common for investors to buy at higher prices such as $11 or $12 to back big-name SPAC founders such as venture capitalist

Chamath Palihapitiya

and former Citigroup Inc. deal maker

Michael Klein.

In another sign blank-check firms are now frequently traded by individuals, several SPACs and companies that have merged with them recently joined GameStop and AMC on a list of stocks that had position limits on Robinhood Markets Inc., a popular brokerage for day traders. Those restricted included Mr. Klein’s Churchill Capital IV and a few of Mr. Palihapitiya’s SPACs in the

Social Capital Hedosophia

SPCE 2.74%

franchise.

The flood of money pouring in is a concern for skeptics who worry that everyday investors don’t understand the dangers of the trade. Even recent losses in a few hot companies such as electric-truck startup

Nikola Corp.

NKLA -0.39%

and health-care firm MultiPlan Inc. that merged with blank-check firms aren’t deterring investors because of the gains in other SPACs.

“It’s a tremendous amount of speculation,” said

Matt Simpson,

managing partner at Wealthspring Capital and a SPAC investor. His firm invests when SPACs go public or right after, then takes advantage when shares rise and typically sells before a deal is completed. He advertised an expected return from the strategy of 6% to clients, but last year it returned 20%.

Ninety-one SPACs have raised $25 billion so far this year, putting the market on track to shatter last year’s record of more than $80 billion, according to data provider SPAC Research.

Fast gains in the shares can result in big payoffs for their founders and the first investors in blank-check firms like Mr. Simpson. These earliest investors always have the right to withdraw their money before a deal goes through. The traders who get in later don’t have those same privileges, but that hasn’t been a deterring factor.

“If you don’t take a risk, there’s really no opportunity at all,” said

Chris Copeland,

a 36-year-old in upstate New York who started day trading on the platform Robinhood with his girlfriend last month. Roughly three-quarters of his portfolio is tied to SPACs such as

GS Acquisition Holdings Corp. II.

Mr. Prieto checks SPACs on his phone. ‘I would just have a bad case of FOMO if I wasn’t in SPACs,’ he says.



Photo:

Cassidy Araiza for The Wall Street Journal

Trading volumes in many popular blank-check firms have increased lately, an indication of investors’ heightened activity. That trend is even drawing attention from some SPAC founders.

“It worries me,” said veteran investor and SPAC creator

Bill Foley.

Trading volumes have surged in one of the SPACs founded by the owner of the Vegas Golden Knights hockey team, especially since it announced a $7.3 billion deal to take

Blackstone Group Inc.

BX 0.21%

-backed benefits provider Alight Solutions public last week.

One reason traders are getting into blank-check firms when they are just pools of cash is that the time it takes for a SPAC to unveil a deal has dwindled. Blank-check firms normally give themselves two years to acquire a private company, but many these days need only a few months.

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It also doesn’t take long for investor speculation about a blank-check firm’s acquisition to build, particularly because SPACs can indicate the sector in which they hope to complete a deal.

Excitement can be triggered by a SPAC pioneer like Mr. Palihapitiya, who sometimes hints to his more than 1.2 million Twitter followers when activity is coming. The former Facebook Inc. executive took space-tourism firm

Virgin Galactic Holdings Inc.

public in 2019 and last month reached a deal with Social Finance Inc.

Even though he invests in a number of blank-check firms other than his own—often when SPACs need to raise more money to complete deals—shares of his own companies can climb following such tweets. One example came Jan. 21, when one of his blank-check firms rose about 4% after Mr. Palihapitiya started a tweet by saying “I’m finalizing an investment in ‘???.’”

The SPAC has since given back those gains after no news about an acquisition came out and it was revealed that Mr. Palihapitiya’s investments were in companies unrelated to his own. He declined to comment.

Mr. Palihapitiya also has thrown himself into the frenzy of activity around GameStop trading, publicizing an options trade last week in the stock and taking profits on it.

Reports about possible mergers like those surrounding the Churchill Capital IV SPAC and a possible combination with Lucid Motors also quickly attract hordes of buyers. That blank-check firm is now owned by many individuals, including Messrs. Prieto, Copeland and

Jack Oundjian,

a 40-year-old who lives in Montreal.

“I’m very excited that we have a chance to be able to participate in what could be future unicorn companies,” or startups valued at $1 billion or more, Mr. Oundjian said. He said he views SPACs as long-term investments rather than fast trades, and holdings tied to the sector make up about 30% of his roughly $1.2 million portfolio.

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



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US

Jan. 6 Rally Funded by Top Trump Donor, Helped by Alex Jones, Organizers Say

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The rally in Washington’s Ellipse that preceded the Jan. 6 riot at the U.S. Capitol was arranged and funded by a small group including a top Trump campaign fundraiser and donor facilitated by far-right show host

Alex Jones.

Mr. Jones personally pledged more than $50,000 in seed money for a planned Jan. 6 event in exchange for a guaranteed “top speaking slot of his choice,” according to a funding document outlining a deal between his company and an early organizer for the event.

Mr. Jones also helped arrange for

Julie Jenkins Fancelli,

a prominent donor to the Trump campaign and heiress to the Publix Super Markets Inc. chain, to commit about $300,000 through a top fundraising official for former President

Donald Trump’s

2020 campaign, according to organizers. Her money paid for the lion’s share of the roughly $500,000 rally at the Ellipse where Mr. Trump spoke.

Another far-right activist and leader of the “Stop the Steal” movement,

Ali Alexander,

helped coordinate planning with

Caroline Wren,

a fundraising official who was paid by the Trump campaign for much of 2020 and who was tapped by Ms. Fancelli to organize and fund an event on her behalf, organizers said. On social media, Mr. Alexander had targeted Jan. 6 as a key date for supporters to gather in Washington to contest the 2020-election certification results. The week of the rally, he tweeted a flyer for the event saying: “DC becomes FORT TRUMP starting tomorrow on my orders!”

Alex Jones addressed protesters on the Capitol grounds on Jan. 6.



Photo:

Jon Cherry/Getty Images

The Ellipse rally, at which President Trump urged supporters to march to the U.S. Capitol, was lawful and nonviolent. But it served as a jumping-off point for many supporters to head to the Capitol. Mr. Trump has been impeached by the Democrat-led House of Representatives, accused of inciting a mob to storm the Capitol with remarks urging supporters to “fight like hell.”

Few details about the funding and organization of the Ellipse event have previously been revealed. Mr. Jones claimed in a video that he paid for a portion of the event but didn’t offer details.

Messrs. Jones and Alexander had been active in the weeks before the event, calling on supporters to oppose the election results and go to the U.S. Capitol on Jan. 6. Mr. Alexander, for instance, tweeted on Dec. 30 about the scheduled Jan. 6 count for lawmakers to certify the Electoral College vote at the Capitol, writing: “If they do this, everyone can guess what me and 500,000 others will do to that building.”

Julie Jenkins Fancelli, shown in 2019, donated more than $980,000 in the 2020 election cycle to a joint account for the Trump campaign and Republican Party, records show.



Photo:

Barry Friedman/LKLND NOW

A hodgepodge of different pro-Trump groups were planning various events on Jan. 6. Several of them, led by the pro-Trump Women for America First, helped coordinate the Ellipse event; another group splintered off to lead a rally the night before, at which Mr. Jones ended up speaking, and the group organized by Mr. Alexander planned a protest outside the Capitol building.

Mr. Jones, who has publicized discredited conspiracy theories, has hosted leaders of the Proud Boys and the Oath Keepers, two extremist groups prominent at the riot, on his popular radio and internet video shows.

Mr. Jones declined to respond to requests for comment. In a statement, Mr. Alexander said Stop the Steal’s motto is “peaceful but rowdy,” that the violence at the Capitol wasn’t planned by his group and said none of his rhetoric incited violence. Messrs. Alexander and Jones said on Mr. Jones’s show that they tried to prevent protesters from entering the Capitol and sought to de-escalate the riot. Neither has been accused of wrongdoing.

A spokesman for the Trump campaign said it had no role in financing or organizing the Ellipse event and didn’t direct former staffers to do so. A spokeswoman for Mr. Trump declined to comment. At least five former Trump campaign staffers besides Ms. Wren assisted on the logistics of the Jan. 6 rally, according to the permit and Federal Election Commission records.

Ali Alexander, activist and leader of the ‘Stop the Steal’ movement, helped coordinate planning of the Ellipse rally.



Photo:

carlos barria/Reuters

Starting in mid-December, Mr. Alexander began publicizing plans “to march and peacefully occupy DC with #StopTheSteal,” according to organizers and a message saved by

Devin Burghart,

who directs an organization that tracks extremist groups. Mr. Trump on Dec. 19 urged supporters through Twitter to come for Jan. 6 protests that he said would be “wild.”

Mr. Alexander created a website called WildProtest.com, writing: “We the People must take to the US Capitol lawn and steps and tell Congress #DoNotCertify on #JAN6!” He planned and publicized a rally to take place on the Capitol grounds that day. The website was taken offline after the riot.

A representative of Women for America First had applied for a permit to host a separate rally just after the inauguration in January, but the group rescheduled for Jan. 6 after the Dec. 19 Trump tweet, organizers said.

Women for America First’s permit for the Ellipse rally listed several names and positions, including Ms. Wren as “VIP coordinator.” In the 2020 election cycle, the Trump campaign and a joint GOP committee paid Ms. Wren and her fundraising consulting firm $730,000, according to FEC records.

The Ellipse rally, during which Donald Trump spoke, was lawful and nonviolent, but it served as a jumping-off point for his supporters to head to the Capitol.



Photo:

Shawn Thew/Bloomberg News

Ms. Wren had been tapped to handle funding by Ms. Fancelli, the major donor to the Ellipse event, according to organizers. Ms. Fancelli, who didn’t respond to several requests for comment, donated more than $980,000 in the 2020 election cycle to a joint account for the Trump campaign and Republican Party, records show.

Ms. Fancelli, daughter of the Publix Super Markets founder, contacted Mr. Jones and offered to contribute to a Jan. 6 event, organizers said. Mr. Jones connected her to an organizer through Ms. Wren, who handled the funding as she helped coordinate the logistics of a rally with Women for America First. A Publix spokeswoman said Ms. Fancelli isn’t involved in the company’s business operations and doesn’t “represent the company in any way.”

The Ellipse setup cost roughly $500,000, with a concert stage, a $100,000 grass covering and thousands of feet of security structures.

Ms. Wren played a central role in bringing together the disparate group of activists planning events on Jan. 6. She suggested to Mr. Alexander that he reschedule his Capitol rally to 1 p.m. and put into place a list of about 30 potential speakers, including Messrs. Alexander and Jones, who had been listed on websites as associated with the day’s events, according to organizers.

In a statement, Ms. Wren said her role for the event “was to assist many others in providing and arranging for a professionally produced event at the Ellipse.”

The involvement of Messrs. Jones and Alexander triggered debate among the organizers.

Amy Kremer,

chairwoman of Women for America First, said in a statement: “We were concerned because there was an aggressive push to have fringe participation in our event.”

In text messages Ms. Wren sent to another organizer and reviewed by the Journal, Ms. Wren defended Mr. Jones. “I promise he’s actually WAY nicer than he comes off…I’m hoping you’ll [sic] can become besties,” Ms. Wren wrote.

Ms. Wren’s spokesman said the message is “evidence of Ms. Wren assisting in executing an event while also having to diplomatically get people with different agendas on the same page.”

None of the groups obtained a march permit, though Women for America First called the event “March to Save America Rally” and Mr. Alexander’s Stop the Steal promoted a march to the Capitol online.

The Women for America First Ellipse permit said the group wouldn’t conduct a march but noted: “Some participants may leave to attend rallies at the United States Capitol to hear the results of Congressional certification of the Electoral College count.”

Kylie Kremer,

co-founder of Women for America First, said the group didn’t file for a march permit because it went against Covid-19 guidelines and a march wasn’t in its plans.

When Mr. Trump met on Jan. 4 with former campaign adviser

Katrina Pierson,

who had begun working with rally organizers, he said he wanted to be joined primarily by lawmakers assisting his efforts to block electoral votes from being counted and members of his own family, aides said.

Messrs. Alexander and Jones spoke instead at a Jan. 5 rally organized by the Eighty Percent Coalition, a group founded by

Cindy Chafian,

an early organizer of the Jan. 6 event who struck the initial deal with Mr. Jones.

She said she was willing to work with Mr. Jones because “it’s unreasonable to expect to agree with everything a group or person does.”

Mr. Jones’s seed money in the end was used for that Jan. 5 rally, for which he ultimately paid about $96,000, an organizer said. In his speech at that event, Mr. Jones said: “I don’t know how all this is going to end but if they want to fight, they better believe they’ve got one.”

The next day, Ms. Wren personally escorted Mr. Jones and Mr. Alexander off the Ellipse grounds before the two men marched to the U.S. Capitol, according to organizers. She had provided them and many others VIP passes that morning for Mr. Trump’s speech.

Messrs. Alexander and Jones were at the Capitol grounds together on Jan. 6, and Mr. Jones supported protesters with a bullhorn, video footage shows. He urged them to be peaceful and proceed to the area on the Capitol grounds where Mr. Alexander had secured a demonstration permit, according to Mr. Alexander and the footage.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com, Alexandra Berzon at alexandra.berzon@wsj.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Amid the GameStop-led frenzy, Jefferies says ‘plenty of air’ to come out of riskier assets. Another strategist says wait to buy the dip

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Markets are buckled into the fighting chair as another day of the retail-led feeding frenzy on shorted stocks is about to come online.

In case you thought the trading mania was a limited battle between internet day traders and Wall Street hedge funds: videogame retailer GameStop was one of the most traded stocks by value in the U.S. on Wednesday. 

Amateur investors, many based on the Reddit group WallStreetBets, are jumping into heavily-shorted stocks, driving prices to astronomical levels and forcing hedge funds to sell bigger, safer bets to cover losses.

Selloff is creeping to other investments and spooking sentiment. Major indexes took a 2% to 3% ride down on Wednesday and are set to continue surfing.

A must-read: Tendies? Diamond hands? Your guide to the lingo on WallStreetBets, the Reddit forum fueling Gamestop’s wild rise

Our call of the day comes from the U.S. equity researchers at Jefferies, led by global equity strategist Sean Darby, with a bonus call from Sébastien Galy, a strategist at Nordea Asset Management.

The team at Jefferies is clear that the correction in share prices has little to do with fundamentals. Rather, what’s happening is a reflection of a “sentiment shift within some of the more overbought and speculative parts of the market.”

The group’s retail speculative index, measuring the deviation from trend of assets where value is hard to determine, is high at 4 standard deviations. “Hence, there is plenty of air to come out of the riskier financial assets,” the team said.

Darby’s team noted that the short-term worry is whether the “popping” of riskier parts of the market will create a domino effect, as mainstream equities are liquidated to stem losses.

Galy, of the Nordic asset manager Nordea, echoes Jefferies’ caution about a wider selloff. He also says it’s too early to buy the dip, because there’s more to come.

The big moves to cover shorts at a time of high leverage typically forces more deleveraging, Galy said. This is because the constraint on capital from the risk of losses on investments is ratcheting up.

“As a consequence, the cost of hedging downside risk has sharply increased,” Galy said. “This risk reduction could last a few days followed by a sharp liquidity driven rebound in U.S. and to a lesser extent European stocks.”

Galy said that even a dovish Federal Reserve meeting on Wednesday couldn’t turn around this market, which is another signal that it may last.

The buzz

Shares in GameStop
GME,
+134.84%
touched the $500 level in the premarket before pulling back. The stock was just $19 heading into 2021. Fashion brand Nakd
NAKD,
+252.31%
is another stock making a big leap in the premarket, up 130%.

In a Securities and Exchange Commission filing this morning, cinema-theater chain AMC
AMC,
+301.21%
revealed that holders of the company’s convertible bonds have chosen to convert the notes into stock, as shares in the company have rallied around 330% since Tuesday. 

Apple
AAPL,
-0.77%,
Facebook
FB,
-3.51%,
and Tesla
TSLA,
-2.14%
posted earnings after the close yesterday. Technology giant Apple topped $100 billion in quarterly revenue for the first time, crushing expectations, as social-media company Facebook also beat estimates, with sales soaring 156% from “other revenue” — like virtual-reality headsets and video-chat devices. Electric-car maker Tesla reported its sixth straight quarter of profit, but it was a miss on expectations.

But if you can peel your eyes away from the stock market, it is a big day on the economic front. Initial and continuing jobless claims are due at 8:30 a.m. EST, with around 875,000 people expected to have filed for unemployment last week. Gross domestic product figures for the fourth quarter of 2020 will come at the same time, before new home-sales figures for December are reported at 10 a.m.

After the Federal Open Market Committee decided to hold monetary policy steady yesterday, Fed Chair Jerome Powell gave dovish signals that the central bank wasn’t done restoring the COVID-19 pandemic-ravaged economy to health. “We have not won this yet,” he said.

The markets

It looks like another wild day on Wall Street. Yesterday’s tumult saw the Dow Jones Industrial Average
DJIA,
-2.05%
tumble more than 630 points, and stock market futures
YM00,
-0.07%

ES00,
-0.31%

NQ00,
-0.90%
are pointing down, set to continue the selloff. Asian markets
NIK,
-1.53%

HSI,
-2.55%

HSI,
-2.55%
fell across the board and European indexes
SXXP,
-0.76%

UKX,
-1.13%

DAX,
-0.86%

PX1,
-0.17%
are firmly in the red.

The chart

Our chart of the day, from Marshall Gittler at BDSwiss, shows how the S&P 500
SPX,
-2.57%
dropped by the most since October 2020, and the VIX index of expected volatility saw its biggest one-day rise since the COVID-19 pandemic hit in March 2020. 

The tweet

When the sharks root for the fish. Billionaire entrepreneur and investor Mark Cuban — of “Shark Tank” fame — is rooting for Reddit’s WallStreetBets traders.

Random reads

An Oklahoma lawmaker has proposed a ‘Bigfoot’ hunting season with a new bill.

Key West wants to ban people from feeding fat, feral, free-roaming chickens.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.

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Business

Strike at Largest U.S. Wholesale Produce Market Threatens Supply Chain

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It is the country’s largest wholesale produce market — described as “Costco on steroids” —and the nerve center for New York City’s food supply, providing more than half the fruits and vegetables that end up in takeout boxes and on restaurant plates and supermarket shelves.

But a strike over a $1-per-hour pay raise demand at the Hunts Point Produce Market in the Bronx, the first in over three decades, has dented its operations, leaving some produce to rot and threatening to snarl a normally seamless supply chain.

The last strike, in 1986, led to shortages of everything from artichokes to grapes.

This time, workers, members of a powerful Teamsters local, entered the sixth day of their strike on Friday after negotiations over a three-year contract broke down over pay. The union has asked for an increase of $1.60 per hour in each year of a three-year contract, with $1 of the raise to go toward wages. The market’s management, a cooperative made up of 29 vendors, countered with an offer of 92 cents an hour each year, with 32 cents of the increase going to pay.

The dispute raises questions about how employees are treated at a time when the pandemic has set off a stark divide between people who have had to keep showing up to work and others who have been able to work from home.

The workers, who earn between $15 and $22 an hour, say they deserve a better raise because they are risking their health to supply the city with food during the outbreak.

Six workers have died and about 300 have gotten sick after contracting the coronavirus, said Charles Machadio, the vice president of the union, Teamsters Local 202, and a veteran worker at the market. Still, the market has remained open around the clock, seven days a week.

“We’re all living in an uncertain world. I might be dead tomorrow, you might too,” he said. Mr. Machadio said that the market’s merchants should recognize that workers “have been coming to work, keeping your businesses going, risking their lives.”

A dollar raise, he said, would be a way of saying “thank you guys for coming to work, you really are heroes.”

None of the merchants contacted would speak about the labor disagreement, but they provided a joint statement.

It said the cooperative had spent $3 million on personal protective equipment for workers and shifted work flows and work stations to make the market safer, without having to lay off anyone.

“Despite all of these challenges, we are very proud to have kept our union workers — the vast majority of whom live right here in the Bronx — working and on payroll with full health benefits as the Bronx has seen an unemployment rate of 40 percent,” the statement said.

Though hundreds of workers have walked off the job, the strike so far does not seem to have had a significant impact on the food supply, according to some grocery stores supplied by the market.

Union members have set up picket lines outside the sprawling market every day, and on Tuesday the police arrested six of them for obstructing traffic.

Several prominent politicians, all Democrats, have waded into the dispute. Representative Ritchie Torres and Andrew Yang, who is running for mayor, rallied in front of the market terminal on Monday. And on Wednesday, Representative Alexandria Ocasio-Cortez distributed hand warmers and coffee to strikers.

“There’s a lot of things upside down right now in our economy,” she said. “One of those things that are upside down is the fact that a person who is helping get the food to your table cannot feed their own kid.”

The strike comes as labor groups have pushed the city to grant greater protections to workers, particularly those in the food industry. Last month, the City Council approved two union-backed bills that ban major fast-food companies from firing employees without a valid reason and allow them to appeal terminations through arbitration.

But at Hunts Point, the cooperative has pushed back, saying that the pandemic, which has closed many restaurants permanently, had dealt a blow to their business, costing it tens of millions of dollars in lost revenue.

Merchants at the cooperative purchase goods from farms and importers and then distribute products across the city and the broader region. The market moves 300,000 pounds of fruit and vegetables every day — about 60 percent of all the city’s produce by some estimates — and says it makes about $2.3 billion in revenues every year.

Despite the strike, the market remains open, and the cooperative has hired temporary strike-breaking workers to load and unload trucks, prompting angry outbursts from strikers whenever a truck arrives at the market’s entrance.

Noah Lea, who manages a branch of the CTown supermarket chain on the Upper East Side of Manhattan, said he gets all his green vegetables from Hunts Point, hauling in 400 pounds five times a week.

“I’m not worried right now,” he said, adding that the chain hedges against possible disruptions by relying on various markets, including the Philadelphia Wholesale Produce Market, a competitor to Hunts Point.

Other grocery chains, including Gristedes, have also looked to other markets beside Hunts Point since the last strike to avoid potential shortages and to get lower prices. Large chains, like Whole Foods and Trader Joe’s, do not depend on the market for their produce.

The striking workers at Hunts Point said that despite the safety measures adopted by the cooperative, the market is still filled with employees working at times in close quarters. The market is “so crowded, like Penn Station,” said one worker, Francisco Soto.

About 3,000 employees, 1,400 of them union members, work at the vast 113-acre produce market, Mr. Machadio said, which, along with separate meat and fish markets, makes up the Hunts Point Distribution Center.

“We’ve been exposing ourselves to get sick and get our families sick, but we haven’t slowed down one bit,” said Diego Rutishauser, 49, who has worked various jobs at the produce market for 27 years.

Mr. Rutishauser wakes up at 2 a.m. everyday and takes two buses and a train from his home in Jamaica, Queens, to make it to work at 5 a.m.

“We’re not asking the impossible,” he said.

Charles Platkin, the director of the New York City Food Policy Center, said the longer the strike continued the greater the likelihood that supplying produce would become more difficult.

But he said the workers deserved some acknowledgment for keeping the market functioning during a major public health crisis.

“Because it accounts for so much of our food supply, it’s important to recognize the power of that market and how important those frontline workers are,’’ Mr. Platkin said, “and how important it is for your city to pay attention to the labor force there.”

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