MemeStocks Made Moves

Beijing has it out for the tech, entertainment, and education sectors in Mainland China… and especially for firms listed overseas on US exchanges. Investors haven’t felt confident about waiting this one out: the Nasdaq Golden Dragon China, an index tracking US-listed Chinese companies, has fallen over 30% YTD. 

Today, however, Chinese stocks got a big boost because of… US regulators? 🤔 We know that sounds weird.

SEC Chair Gary Gensler mandated that Chinese companies on US exchanges will have to “better inform investors about political and regulatory risks.” The rules were already in place for some of the latest Chinese IPOs, but they’ve been expanded to include the 250 companies already trading. 

This is the first of several proposals set forth by the SEC aiming to increase transparency in overseas firms. Despite some new guard rails, many investors are still concerned about the structure by which companies list on US exchanges. Some investors have even called the Chinese stocks “uninvestable” because of the structure they use to trade in the U.S.

Other investors are feeling better, though. The Nasdaq Golden Dragon China Index made its biggest move higher since July; the index rose 8.03% today.

For the first time in weeks, we’re getting a booster of MemeStock Madness. 😌

The moves turned an otherwise boring market day into a notable one for momentum traders. OG MemeStock $GME led the pack, it rose over 27% today. 🚀 🚀 

It was trailed at the hip by $AMC (+20.3%), Clover Health (+9.85%), and Bed Bath & Beyond (+4.49%). Robinhood, which fetched the attention of MemeStock analysts after a tumultuous IPO, found some upside as well. It rose 9%. 

Here’s how the five performed against the S&P 500 today:

Short interest in MemeStocks have dropped significantly since the January mania. Despite that, 16% of $AMC’s float is still sold short according to MarketBeat. Short interest in $GME has declined to around 10%, a far cry from the 100% it posted in January. GameStop’s volume today was about 3x higher than average, with over 14.2 million shares changing hands.

Meanwhile, the rest of the market marched on to modest gains. Two major indexes notched new all-time highs as investors lay in wait for the Fed Symposium this week. 😴

Millions of conscious consumers are now buying and selling secondhand clothes on consignment apps like Poshmark, ThredUp, and Depop. Now, one millennial fashion brand wants to dive headfirst into the resale wars.

Urban Outfitters’ parent company, URBN, is launching a new thrift app called Nuuly Thrift. Nuuly Thrift will provide a digital resale market to buy and sell women’s, men’s, and kid’s apparel and accessories. The company will support products from any brand.

When users sell an item on the app, they receive earnings directly into their bank accounts. Alternatively, users can get a 10% bonus when they redeem earnings for Nuuly Cash (Nuuly Cash can be used on the app, or at stores like Urban Outfitters, Terrain, Free People, or Anthropologie.) 😮

The app will be an expansion to URBN’s Nuuly business, which already has a rental service for women’s apparel called Nuuly Rent. 

$URBN reported Q2 earnings today. The company recorded sales of $1.16 billion and a net income of $181 million. Both figures were record-breaking for the company, but the stock still erased its day gains in after hours trading, down 5.5%. 

Is Coinbase pulling a Robinhood? A new CNBC article taking aim at the crypto giant alleges that the company hung their users out to dry. 🚨 

The story cites a number of customers who lost tens of thousands of dollars after hackers compromised their account and Coinbase’s support team provided little recourse. The company indicated, in numerous emails to users, that Coinbase was “unable to reimburse [them] for … alleged losses” because the company’s insurance policy does not cover theft from individual accounts.

Furthermore, the company disclaimed liability, saying that there was “no credible or supportable evidence that the compromise of … login credentials was the fault of Coinbase.” That’s likely true, but it’s not confidence inducing considering the company’s lack of real-time help.

According to CNBC, “Coinbase’s customer service has been primarily via email, and many customers say it is hard to reach representatives and that they have not been made whole for their losses.” That sounds familiar. Remember how that turned out for Robinhood? 🤷

Coinbase acknowledges its own issues with customer service. Last month, the company announced its plan to roll out live chat messaging, phone support, and an expansion of its customer support team. It’s about time.