GameStop, AMC, Ford, General Electric, Delta Air Lines, United Airlines… Robin Hood it is sometimes a balloon factory. Or a bubble machine. Spearhead for many retail investors, also a Trojan horse for some foreros of Reddit, this platform has been behind some of the big market moves in recent months.
In a not very memorable week for indices, global stocks have seen the largest weekly inflow of money in their history through equity funds, according to Bank of America, that the figure in about 58.100 million dollars.
Let's not stray from this number throughout the article, as it will offer us an idea of the amount of money that moves daily in the markets, and the weight that a few retailers can have that, well organized and as if they were rebelling against the army. Roman, they may well end up 'plucking' a few mutual funds.
According to a study by SSRN To analyze the impact of the 'boom' of retail investment in the US stock market, its footprint is large. Very big. The traders of Robin Hood, for example, they have been responsible for more than 7% of the variation in stock market returns in the second quarter of 2020.
Let's talk about names specifically. The stock performance of Ford it would have been 7.5% lower in the first quarter of last year without the backing of these investors. The one of General Electric, it would be 2.75% below. In the second trimester, Ford would have risen 20% less, and Delta Air Lines Y United Airlines, 15% less.
WHY DO THE 'LITTLE PEOPLE' MAKE SO MUCH A ROCK?
"The surprising impact of a small group of retailers is due to the fact that a large part of the equity market is managed by institutional investors with inelastic demand curves in price," the study notes. Translated into Spanish, this means that a large part of the bags are in the hands of people with a passive attitude who are invested without caring about the price.
Consider index funds that track the performance of a stock, no matter how or how much. That is why when a minority that operates through platforms such as Robin Hood He fixes himself on a target, makes such a fuss And even more so when it comes to a crowd with torches and a supposedly ideological agenda under its arm to overthrow the 'vulture' funds. Yes, WallStreetBets, We talk about you.