The WSB Short Squeeze War I Experienced

Weekly Reflection

On the evening of January 25th, I saw a report about the Reddit retail investor tribe WSB beating the short-selling institution Citron around GME under the leadership of the big brother DeepFuckingValue (DFV), while the big short Michael Burry reaped the benefits but scolded WSB for not following martial ethics.

In my spare time on the 26th, I registered on Reddit and sneaked into WSB and their Discord. Familiarized with words like mooooonnn, 🚀, YOLO, it really was a joyful gathering place for fools. It turned out that this community was founded by Jaime Rogozinski for fun in early 2012. Before 2019, there were only a few thousand members, and the forum was just a group of happy fools, having fun fighting pictures every day.

After the GME Battle, WSB members skyrocketed to more than 5 million. Some came to watch the excitement, some came to be undercover agents, and some thought about choosing a side to make a fortune from the war, but more people came to support WSB to defeat the short sellers. One brother said he sold his grandmother’s sewing machine to join WSB, and another brother said he took his father’s life savings to participate in the war. The stories are touching one by one. The revolutionary team becomes purer as it goes.

After wandering around the forum, I found that WSB is not only good at playing treasures and acting cute, they have a wealth of financial knowledge, trading ideas and attack directions. Browsed their DD and YOLO. GME has the most 🚀 and moon, followed by AMC, NOK, BB. At this time, former Goldman Sachs analyst Will Meade analyzed on Twitter that the short-selling rate of AMC, CLVS, and KOSS stocks all exceeded 35%, which may be WSB’s next attack. KOSS has a small plate, and there are many people discussing KOSS headphones on Reddit, so it may be the next skyrocketing stock. Instead of watching from the other side, it is better to participate in person. With the mentality of small gambling for pleasure, I placed an order for 66 shares of KOSS at 6.66 yuan at 23:30 on the evening of the 26th and went to sleep.

On the morning of the 27th, I saw that the battle was fierce the previous day, and KOSS did not pull back deeply to 6.66 yuan, so I bought 66 shares of KOSS at a price of 10.4 yuan during the after-hours trading time, and placed a sell order at a price of 29.9 at 23:30 that night and went to sleep.

On the morning of the 28th, I looked at the holding position again. It turned out that half an hour after placing the order the previous day, KOSS climbed to 29.9 yuan and the deal was done. The highest price on that day reached 66 yuan, and the increase throughout the day exceeded 480%.

Starting from the 28th, the battle became more and more fierce, and WSB concept stocks began to concentrate on GME and AMC stocks. I saw the SaveAMC campaign on Twitter, and thought that Brother Wang invested 2.5 billion US dollars in AMC and didn’t make any money, so I bought 66 shares of AMC at a price of 15.7 pre-market to show support. Pre-market, AMC once surged more than 20%, and I thought it would be another night of WSB victory. But at the opening time, many WSB found that they could only sell or close positions of GME, AMC, NOK on RobinHood, but could not buy. WSBers complained one after another that Wall Street could not afford to lose and did not follow martial ethics. One WSBer said that this is playing a game and can’t beat you, so pull your network cable, while another WSBer corrected that they turned off your monitor, but he was still hammering you. I think WSB is in danger today. To show support, I held AMC firmly. Sure enough, AMC closed down 56.6%. While I was sleeping soundly, WSB was fighting fiercely, and I felt sad.

On the 29th, some WSBers raised funds to initiate a lawsuit, and some congressmen wanted to initiate a hearing. Under pressure, RobinHood allowed users to buy and sell WSB concept stocks. Musk scolded short sellers and promised that if the GME price exceeded $1000, he would put the GME Logo on SpaceX’s next rocket and send it to the sky…moooonnn! 🚀🚀🚀🚀🚀 After-market, WSB concept stocks surged again…

Before the opening on the 29th, the SEC announced that it would punish brokers who hindered user trading. RobinHood raised $1 billion in cash from JP Morgan to ensure normal user trading. Citron stated that it would not short in the future and focus on long. AMC, GME, KOSS rose more than 50% throughout the day. AMC closed at 13.26 yuan, with a floating loss of 14.27%. The after-market announcement showed that Sliver Lakes, the second largest shareholder of AMC, converted $600 million of AMC convertible bonds generated in 2018 into 44.4 million common shares at a price of $13.51/share, and sold them all at an average price of $16.05 this week, making a profit of $113 million. WSBers were very calm after seeing it, thinking that Sliver Lakes sold at a loss. In order to SaveAMC, they must hold AMC stocks firmly until the epidemic ends and AMC resumes business…

As a small movie lover, of course I supported…

Events of the Week

The US leeks war against Wall Street, in the end will 100 millionaires with 5 million win, or 5 million retail investors with 100 dollars win? The plot is full of ups and downs, and the truth is confusing. How the story will evolve, we need to continue to observe…

Market of the Week

Period: 2021-01-18 ——— 2021-01-24

Review 3 weeks ago: A-shares welcomed a good start with three consecutive rises, and the turnover of the two markets exceeded 1 trillion yuan for five consecutive days. However, from the market perspective, individual stocks showed extreme 20-80 differentiation. The leading stocks clustered by funds continued to rise, and the PE of some industry leading stocks even exceeded 100 times, while most small and medium-sized stocks fell. Wind industry sectors top 3 gainers were energy equipment, oil and natural gas, chemical raw materials; top 3 losers were office, education, motorcycles. Wind concept sectors top 3 gainers were yellow wine, bicycles, titanium dioxide; top 3 losers were lithium batteries, battery electrolytes, CAR-T.

Review 2 weeks ago: A-share three major indices were basically flat with last week. Consumption and other sectors clustered by funds in the early stage were sluggish, and public funds began to flow to semiconductors. Wind industry sectors top 3 gainers were motorcycles, telecommunications, banks; top 3 losers were agriculture, precious metals, aerospace. Wind concept sectors top 3 gainers were semiconductors, transportation, Yangtze River Storage concept; top 4 losers were yellow wine, beer, aquatic products, liquor.

Review 1 week ago: ChiNext Index surged 8.68% in a week, and the three major indices showed an overall upward trend this month. Shanghai-Shenzhen-Hong Kong Stock Connect showed net inflow for four consecutive weeks, and it can be concluded that there is incremental capital flowing into the stock market. Wind industry sectors top 3 gainers were petrochemicals, chemical fibers, power generation equipment; top 3 losers were telecommunications, insurance, beverages. Wind concept sectors top 3 gainers were rare earth, CRO, medical services; top 3 losers were insurance, mining services, cement index.

Review this week: All major global indices fell this week. The main reason for A-shares is that the central bank started a “mini” reverse repurchase and withdrew funds, and market liquidity suddenly appeared tight. US stocks are mainly due to WSB chasing and beating Wall Street. For the first time in 4 weeks, Stock Connect showed a net outflow, and Hong Kong Stock Connect net inflow this month exceeded 250 billion RMB. Wind industry sectors top 3 gainers were airports, catering and tourism, and alcohol; top 3 losers were motorcycles, shipping, and aerospace. Wind concept sectors top 3 gainers were air transport, HNA series, and rare earth; top 3 losers were aero engines, third-generation semiconductors, and aviation equipment.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite	3483.07	-0.63	1.13	-0.1	2.79
Shenzhen Component	14821.99	-0.61	0.7	-0.25	5.86
ChiNext Index	3218.86	-1.04	8.68	0.02	6.22
Hang Seng Index	28283.71	-0.94	3.06	0.27	1.2
HSCEI	1012.76	-1.22	0.78	0.24	-0.43
Hang Seng HK Chinese Enterprises	3874.18	-1.18	0.93	-0.67	2.4
Dow Jones	29982.62	-2.03	0.02	-0.57	1.61
Nasdaq	13070.70	-2.00	3.28	-0.87	2.43
S&P 500	3714.24	-1.93	1.21	-0.72	1.83

Market (CNY, Billion)	This Week	Previous Week	2 Weeks Ago	3 Weeks Ago
Shanghai Connect	-56.95	11.45	44.87	105.37
Shenzhen Connect	-10.41	84.62	134.72	85.91
Hong Kong Connect	664.22	798.46	585.95	546.41

Positions

A-shares: Zhongjia Bochuang cleared the risk of greater losses after a one-time provision for goodwill impairment in 2020. Although the three businesses of 5G messaging, base station maintenance and credit card collection were affected by the epidemic in 2020, they are developing overall. According to its description in the private placement application, after April 2021, the three major operators will restart the base station operation bidding, and the bottom performance is guaranteed. During the Spring Festival, whether operators and merchants will test 5G messaging on a large scale is worth paying attention to. I believe the company will have good performance under the leadership of Wu Ying, a big shot in the telecommunications industry.

Hong Kong and US: It is estimated that fintech will take a long time to recover, and clear positions at a loss.

Funds: Try the people investment + track investment mode. People investment mode: Like Xie Zhiyu’s (Xingquan Herun Graded) ability boundary circle view, Liu Yanchun is a stability player (Invesco Great Wall Domestic Demand Growth Mixed), Zhou Haidong (Huashang Trend Flexible) is a big open and close player, betting heavily on optimistic industries, such as mining in the fourth quarter. Liu Bin (Xinhua Xin Dongli Flexible Allocation Mixed) is a PhD in materials science. All technology disputes, mapped to the industry, are ultimately material disputes. Track investment mode: Optimistic about medical (GF Medical Health A), technology (E Fund Information Industry Selected Stocks), military industry (E Fund National Defense Military Industry Mixed), and high-quality technology companies (Huaxia New Era Mixed) in 2021.

Code	Name	Current Period Dynamics
SZ000889	Zhongjia Bochuang	Add
LU	Lufax	Clear
F260104	Invesco Great Wall Domestic Demand Growth Mixed	Flat
F163406	Xingquan Herun Graded	Add
F166301	Huashang Trend Flexible	Flat
F002083	Xinhua Xin Dongli Flexible Allocation Mixed	Flat
F005827	E Fund Blue Chip Selected Mixed	Clear
F004851	GF Medical Health A	Flat
F010013	E Fund Information Industry Selected Stocks	Flat
F005534	Huaxia New Era Mixed	New
F001475	E Fund National Defense Military Industry Mixed	New