January 24, Saturday.
New York At eight o'clock in the morning, Zhao Chen brewed a pot of Iron Goddess of Mercy in the living room of the hotel Suite.
Shen Zhiyi was sitting on the sofa by the window, flipping through the tablet, and Su Wantang brought a plate of cut fruits from the kitchen.
Outside the window is the dead winter forest of Central Park, with the morning light shining slantingly on the snow.
Shen Zhiyi flew back from Shan City late last night.
She stayed at New York for two weeks, responsible for supervising the compliance traces of GME trading,
I flew back to Chongqing last Tuesday to handle Henglong Legal Department's quarterly compliance review.
Originally planned to stay for a full week, but domestic affairs were handled faster than expected--
Zhang Qingxue took over the framework construction of the global compliance system, and Chen Xi's independent verification report of A-share's liquidation also required her signature for confirmation.
In three days, she completed all the backlog of approvals and then booked the fastest flight back to New York.
Su Wantang arrived before her.
Zhao Chen In the month of New York, Su Wantang flew back and forth three times--
Chongqing Henglong Charity Foundation's annual audit, the final draft of the ESG research report, and a docking meeting with a public welfare organization United States.
The three people's time at New York is always staggered, but this week, they rarely get together.
"What time did you arrive yesterday?" Su Wantang put the fruit plate on the coffee table.
"One o'clock in the morning."
Shen Zhiyi turned a page on the tablet,
"Lawyer Lin sent a car to pick me up. We got to the hotel at 2:30 and slept for five hours."
Zhao Chen poured a cup of tea and handed it to her. "Has everything been processed in China?"
"It's processed. Aunt Zhang handed over the first version of the global compliance system framework, covering the compliance requirements of the three markets US Stocks, Hong Kong Stocks, and A-share.
I have signed the A-share liquidation independent verification report of Chen Xi. The valuation deviation of Baijiu has entered the warning range. Investment Decision Committee is waiting for your final confirmation."
"We'll talk about it in two days. Let's wrap up GME first."
Shen Zhiyi nodded and turned the tablet over to show him.
On the screen was a screenshot of the front page of the weekend edition of "The New York Times", with a title of only three words--
"The Awakening".
The subtitle is:
"From GameStop to Wall Street: How the collective awakening of retail investors is changing the power structure of financial markets."
Zhao Chen took the tablet and looked through it slowly.
The article started with the stock price trend of GME, but soon turned to a larger theme--
Over the past decade, how retail investors' role in financial markets has moved from the margins to the center.
The article quoted data from Federal Reserve: In 2010, the market value of stocks held by United States retail investors accounted for less than 30% of the total market value.
By the end of 2020, this number had exceeded 40 percent.
The popularity of zero-commission trading platforms, the spread of information on social media, and the wave of home trading after the flu,
The superposition of these three factors has created a new generation of retail investors.
Then the topic of the article changed -
"But the GameStop incident revealed not only the increase in the number of retail investors. It also revealed the awakening of retail investors' consciousness."
Zhao Chen stopped at this section and read it twice.
The article continues:
"Before GameStop, retail investors were always 'leeks' in the narrative of Wall Street - the targets of being harvested by institutions.
But GameStop changed everything.
When retail investors find that stocks with a Short Selling ratio exceeding 100% can be Short Squeeze,
When they discover that institutional investors' Short Position will become their own weapons in Gamma Squeeze,
When they discovered that retail investors who united could liquidate a Ten-Billion-US-Dollar Hedge Fund company in one trading day--
Wall Street's power structure is beginning to shake."
Shen Zhiyi said, "The author of this article is Andrew Ross Sorkin. You have read the book "Too Big to Fail" he wrote last year."
Zhao Chen nodded. "Sorkin saw the essence. GME is not a speculation. It is an uprising."
Su Wantang sat down next to him. "Is the word uprising too strong?"
"It's not heavy." Zhao Chen put the tablet on the coffee table.
"Wall Street Short Selling GME, they thought retail investors were fools.
They were wrong. Retail investors are not stupid, retail investors just don't have weapons. Now they do.
WallStreetBets Forum is a weapon. The zero commission platform is a weapon. Gamma Squeeze is a weapon.
And most importantly - they learned how to use these weapons."
Shen Zhiyi Turn to the subsequent paragraphs of the article.
"Sorkin also mentioned the issue of supervision.
He said that the SEC faces a dilemma - if it restricts retail trading, it will be accused of being a lackey of Wall Street.
If left unchecked, systemic risks will accumulate."
"SEC will not impose restrictions." Zhao Chen continued to explain,
"They don't dare. GME is now a full-fledged news.
Yesterday "Xinwen Lianbo" was played for thirty seconds.
Today, the overseas edition of "People's Daily" published a commentary. Do you know what this means?"
Shen Zhiyi looked at him.
"Meaning that GME is no longer a stock.
It is a symbol.
Retail investors rebel against the symbol Wall Street.
If the SEC restricts trading at this time, it will be an enemy of retail investors around the world.
They won't do that."
Su Wantang picked up Remote Control and turned on the TV. CNBC's weekend special was playing a street interview.
The reporter stood at the door of New York Stock Exchange, behind him were several young people holding GME signs.
The reporter stopped a middle-aged man wearing a red hoodie.
"Why did you buy GME?"
The man turned around and said to the camera:
"Because I've had enough.
In 2008, Wall Street crashed the economy, ordinary people like us lost our jobs and our houses.
What about them? They get government bailout bonuses.
Now their Short Selling GME, Short Selling ratio is one hundred and five percent.
They wanted us to die. But we won't die this time.
We buy. We hold. We let them die."
The reporter asked again, "When will you sell?"
The man thought for a while. "Wait until they are all dead."
The screen cut back to the studio. The host turned to the guest - a former SEC member.
"Did you hear what the investor just said?
He said 'wait until they are all dead'. This sentiment is very common among retail investors. What do you think?"
The former SEC commissioner pushed up his glasses.
"This is indeed a new phenomenon.
In the past, retail investors were passive in the financial market and were price takers.
But now they organize through social media and have the capacity for collective action to confront the establishment.
This is both a good thing and a risk.
The good thing is that the market is more democratized, the risk is that the market may be driven by emotions and deviate from Fundamentals."
The host asked, "But GameStop's Short Selling ratio does exceed one hundred percent. This is a fact."
"This is a fact. The Short Selling ratio exceeds one hundred percent, which means that Short Sellers borrowed more than the total amount of Circulating Supply stocks.
This itself is a structural flaw in the market. Retail investors discovered this flaw and took advantage of it.
In a sense, this is a stress test for Wall Street."
Zhao Chen Turn off the TV.
"The committee member is right. GME is a stress test of the market structure.
The result of the test is - after the ratio of Short Selling exceeds a certain threshold, Short Sellers will trample itself to death.
This conclusion was verified once on Tesla and a second time on GME."
Shen Zhiyi picked up the tablet and continued reading.
"Bloomberg's weekend column wrote a longer analysis.
The title is 'Looking at the awakening of retail investors' consciousness from GameStop: an irreversible structural change'."