◆ Korean version of GameStop diagnosis ◆
The highest international silver price in eight years has hit $29.4 per ounce, the highest since February 2013, and an employee is cleaning up the silver box at the Korea Gold Exchange in Jongno, Seoul on the 2nd. [이승환 기자]– Regarding the possibility that the’Korean version of the game stop movement’ will actually be expressed, experts say it is possible due to the nature of the Korean stock market, which has a high proportion of individual investors, but the Korean government has banned short selling for the longest time in the world. Comes out.
Lee Dong-yeop, a professor at Kookmin University’s Department of Business Administration, said, “There is no possibility that the GameStop situation will be reenacted only for small and medium-sized stocks that have a small transaction volume and a large share of short selling.” “There is no stock with a high proportion of short selling.”
However, experts are skeptical about whether Korean individual investors will be able to create a’short squeeze’ (squeeze short selling) situation in the battle for Celltrion stock price.
Hwang Se-woon, a research fellow at the Capital Markets Research Institute, said, “Celltrion has a large market cap and a proportion of short-selling less than 5%. Because the proportion of short-selling is lower than that of Gamestop, even if an individual buys Celltrion intensively, short-selling investors suffer relatively It has no choice but to be weak,” he explained.
Short selling is a method of making a profit by selling a stock borrowed from another person and then buying it back and paying back when the stock price falls. If the stock price continues to rise, you should buy stocks before the price rises further to reduce short-selling, interest expenses, and other losses. Short squeeze refers to a sharp rise in short selling stock prices in this situation.
– In Korea, large-cap Celltrion is also targeting short selling by foreign institutions such as Goldman Sachs, JP Morgan, and Morgan Stanley. On the 2nd, the share price of Celltrion fell 4.18% to 355,500 won per share.
This is 1.9 times the target price of JP Morgan (KRW 190,000), which presented an opinion to sell Celltrion in September last year. The market cap of Celltrion is about 48.94 trillion won, which is more than twice that of the US small-cap game stop ($15.693 billion, about 17.53 trillion won).
In order for the fight against short selling to end with individual investors’ victory,’sustainability’ is the key. According to S3 Partners on the 1st (local time), the amount of short selling GameStop has decreased by 35 million shares last week, and as a result, it is now 2,713 million shares in half. “As speculative demand for certain stocks decreases, the volatility of (call) options also decreases, so a significant number of Reddit ants have left GameStop and moved elsewhere,” said Chris Murphy, co-head of derivatives products at global investment firm Susque Hana International. It seems to have been discarded.”
Reddit is a major online community in the U.S., particularly where the stock investment forum’Wall Streetbets’ and the cryptocurrency investment forum’Satoshi Streetbets’ attracted the embers of the war against short selling.
Young individual investors gathered in the Reddit discussion room and intensively bought GameStop stocks and call options through Robin Hood, a’stock brokerage fee free application’, leading to a massive withdrawal of short-selling hedge funds that bet on the stock price of the stock.
It is unclear whether the case of GameStop will fall under the price control. Sung Hee-Hul, a professor at Inha University’s Law School, said, “If you see the’organized movement’ in the domestic law, there is room for it to be judged that it falls under Article 176 of the Capital Markets Act or the illegal transaction of Article 178.” Professor Seong explained, “In an unorganized state, individuals voluntarily move and buy is the area of freedom of expression.”
– After Corona 19 from China swept the world in March last year, major governments and central banks in major countries, including Korea and the United States, poured unprecedented liquidity into the market to boost the economy. In the midst of this, in Korea, young individual investors in the 2030s, who encountered the `real estate barrier’, jumped into the stock market, and in the US, young investors took the lead with Robin Hood and Reddit.
According to the financial investment industry on the 2nd, the Korea Exchange set a goal to complete the development of an illegal short selling detection system within this month in preparation for the revival of short selling on March 16.
Under the current system, borrowing short selling by borrowing stocks by paying margin is allowed, but non-borrowing short selling without borrowed stocks is illegal. However, even if there was an illegal short sale or a suspicious transaction, the exchange did not have a computerized infrastructure to monitor in real time, but through this work, it will monitor the quotation. Currently, political circles have expressed opinions about extending the ban on short selling, which is scheduled to end on March 15, to June, but the exchange is planning to prepare according to a fixed schedule.
On the day, Kim Yong-beom, the first vice minister of the Ministry of Strategy and Finance, said, “In a digital trading environment where many market participants can easily access real-time investment information, collective actions such as the game stop may appear frequently, so I will pay close attention to the wave.”
[김인오 기자 / 신유경 기자]
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