A social-herding investing philosophy is an investment construct which is unbounded and unconstrained by geography where people congregate on social media platforms, to herd investment in the stock markets, shifting pricing equilibrium points, not through fundamental elements of the affected companies or the economy, by rather, through a passion, anchored on the mechanics that the traditional capital market is a quasi video game platform, which with small funds from many people, can be played, for some to win and others to lose, creating ephemeral fun, for the participants.
GameStop continues to rattle the investing world. Shares of the beleaguered electronics-store chain jumped 68% Friday, bringing its gains this month to about 1,700%, thanks to a band of small traders who organized in a Reddit forum. Movie-theater operator AMC Entertainment experienced similar gains, with a 278% bump in stock price to end the week. While the David vs. Goliath tale of Reddit users vs. hedge-fund managers sent the markets into a tizzy this week, the aftershocks may be long-lasting, and questions remain about how trading platforms such as Robinhood handled the surging volatility.
Melvin Capital, a hedge fund, and which shorts stocks, lost 53% in January, hurt by GameStop and other bets. Some other short betters are receiving threats as some young people continue to see the capital market as a video game which must be won by all means.
Melvin Capital, a premier Wall Street hedge fund entangled in the frenzy over GameStop (GME), lost 53% in January, a source familiar with the matter told CNN Business.
Melvin, a major short-seller of GameStop, bet that the company’s shares would drop. But, on January 11, GameStop announced new board members who could help it with digital sales. That set off a fury on Reddit, namely subreddit WallStreetBets, which catapulted GameStop’s stock more than 1,600%.
Hedge funds like Melvin with huge short positions in GameStop and other stocks targeted by WallStreetBets got burned. The Reddit group specifically targeted stocks that were heavily shorted. At one point, GameStop had more short interest than shares on the market.
These guys are already distorting market systems and changing the market ordinance: “Some hedge funds that practice short selling, or placing financial bets against stocks, have already begun adjusting their operations. Prominent firm Citron Research said it will stop offering short-selling analysis after two decades of providing the service.”
Be worried because today they are playing to push a stock up, one day they can decide to take one down, creating distortion that will rattle markets.
We thank you for the confidence. We are thankful to the thousands who have chosen us. Tekedia Mini-MBA 4th edition begins next week, Feb 8. If you have not registered or registered your staff, do it here . We come with humility into the classroom knowing that you are already amazing in your business or your mission.
But that humility is baked on uncommon commitment and passion to take you to the next level. Our members have moved from our classroom to big things. Some were made GMs, some advisors to governors (thanks Gov Obiano of Anambra state), some raised capital (Symplifix) and many advanced their professional missions.
Tekedia Mini-MBA (Feb 8 – May 3, 2021): online, self-paced, close to 100 great faculty members, world-class curriculum, Africa’s largest business school, and costs $140 (or N50,000 naira) per person. Discount available for largest teams.
Greetings – and please read the following from Tekedia Institute.
Tekedia Hub – “Facebook for Innovators” is ready. You can go ahead and register. The app will be released this week. We hope to use it to deepen learning. Tekedia Hub is an ecosystem developed for innovators and growth champions, to co-learn and co-share, on the mechanics of business systems and innovation. It has capabilities to enable members to form groups, follow others and be followed, and discuss important things, around business, education and more. Among others, the Hub will support learners and members of Tekedia Institute. Begin here – https://hub.tekedia.com/
Our Lead Faculty, Prof Ndubuisi Ekekwe, has an article to be published at Harvard Business Review at 9am New York time on Monday. It is on capturing value in market systems. We will share link here.
If you missed our last webinars- “The 2021 Winning Playbooks” and “The 2021 Outlook: Growth After A Redesign” – the recorded videos are here.
Meanwhile, Tekedia Mini-MBA 4th edition begins next week, Feb 8. If you have not registered, do it here – https://school.tekedia.com/course/mmba4/ . And please help us and share this message below with your colleagues and associates.
Tekedia Institute invites you to register for the 4th edition of Tekedia Mini-MBA (Feb 8 – May 3, 2021). Tekedia Mini-MBA is an innovation management 12-week program, optimized for business execution and growth, with digital operational overlay. It runs 100% online. The theme is Innovation, Growth & Digital Execution – Techniques for Building Category-King Companies. All contents are self-paced and recorded which means participants do not have to be at any scheduled time to learn.
This sector-agnostic program has more than 100 faculty from leading companies like Flutterwave, Microsoft, MTN, Access Bank, Afreximbank, KPMG, Shell, Schlumberger, Nigerian Breweries, etc, handling courses in more than 32 domains of business and leadership. More students graduated from it in 2020 than any school in Africa. From executives in Singapore to Nigerian bank managers to startup leaders in India, the last edition attracted learners from 35 countries and their testimonials are positive.
The acquired capabilities have helped learners to get new jobs, get promotions, raised funding, and advanced their careers and the companies they work for. The Institute is currently working with dozens of companies, providing a mechanism to co-design growth strategies in companies. More than 30% of learners are sponsored by companies and those firms include Soulmate Industries, Lily Hospitals, Problem Space New York, to name just a few.
Tekedia Mini-MBA costs N50,000 or $140 per user, and payment can be made via bank transfer, PayPal, Flutterwave, Bitcoin, etc.
Prof Ndubuisi Ekekwe, a World Economic Forum YGL and a regular writer in the Harvard Business Review, and who holds two PhDs and four master’s degrees, including a PhD from Johns Hopkins University, coordinates the program. He recently licensed a robotics patent to the United States Government. The ace circuit designer co-designed the accelerometer used in Apple iPhone’s early generations.
Besides the program, participants get other benefits, including Prof Ekekwe’s books like “The Dangote System: Techniques for Building Conglomerates”, Career Week, Innovation Week, Special Labs on Remote Work Administration (Krozu, USA), Decentralization Finance (BoundlessPay), Digital Security (Infoprive), among others, as coordinated by the Institute.
Class begins Feb 8, 2021 and we invite you to join us. Click to learn more and pay here: https://school.tekedia.com/course/mmba4/
In every market, there are frictions. Frictions extend into the needs of customers which they want fixed. A hungry man in Lagos, Nigeria, has a friction which is to find food and eat. A businesswoman looking for a loan has a friction of finding capital for her business. But due to information asymmetry (one party has more material knowledge than the other), markets are inherently imperfect, making it difficult for demand (the consumers or buyers) and supply (the providers) to come into an optimal equilibrium.
To overcome these challenges – the imperfection in markets and the friction experienced by market players, establishing companies becomes important. Through companies, factors of production are organized. And that organization of factors of production produces a force called “products and services”. Through products and services, companies exert forces which overcome the “frictions” experienced by customers. This is consistent with basic physics: a friction experienced by a customer must be overcome by a force (i.e. product or service) delivered by a provider. Companies exist to create products and services to fix market frictions!
