NDP Leader Jagmeet Singh says that day traders are “not the problem” and that the hedge funds should face more regulation following a volatile week on the stock market.
“The regulation should be clearly on the Wall Street bankers who effectively almost created, or did create, a complete economic meltdown because of their greed,” Singh said, referring to the 2008 stock market crash.
“Folks that are trading and day trading or… engaged in different stock buying and selling – they are not the problem. The problem that we’ve seen historically has been a lack of regulation of folks on Wall Street who have taken advantage of workers.”
Singh did not expand on how these Wall Street bankers should be regulated, but he added that Canada should ensure the wealthiest are “paying their fair share.”
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His comments come after multiple individual investors have honed in on the GameStop stock and others, causing hedge funds that had engaged in a practice called short selling to lose massive amounts of money.
2:03 ‘Short squeeze’ results in sharp rise in share price for video game retailer Gamestop
‘Short squeeze’ results in sharp rise in share price for video game retailer Gamestop
Short selling is what happens when professional investors borrow shares of stock in a company they expect to fail. These investors take that borrowed stock, sell it, and then buy it back later so they can return it to its original owners – all while pocketing the difference.
However, it’s a risky game to play if the gamble fails and the company doesn’t falter. That’s what happened when droves of Reddit users piled their money into GameStop shares, which was one of the most heavily shorted stocks on the market.
This practice, called a short squeeze, caused the price of the GameStop shares to skyrocket. These day traders also threw piles of money at other shorted stocks, including AMC, BlackBerry and Nokia. Because these hedge funds had pledged to buy back the stock they had borrowed, they were on the hook for the indefinitely increasing price of the stock.
At first, some of these hedge funds opted to hold on, hoping that the individual investors – the little guys of the trading world – would see their skyrocketing gains and sell the stock, pocketing their reward.
But that’s not what happened. In what many Reddit users are calling a “class war,” they are “holding the line” and refusing to sell. The end result of that is that they are squeezing indefinite sums of cash out of the hedge funds that had decided to gamble on the company failing.
0:53 White House monitoring stock situation involving GameStop, other firms
White House monitoring stock situation involving GameStop, other firms
While some stock market observers are warning that this is a risky game that could see many average folks losing money when the artificially inflated stock price inevitably drops, others are applauding the investments as a stand being taken against Wall Street.
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They’re framing the average Joe retail investors as the David taking on Wall Street’s Goliath.
“Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino,” tweeted U.S. Rep. Alexandra Ocasio-Cortez.
“Anyways, Tax the Rich.”
At the time, Singh echoed the message on Twitter.
“Agree and agree. Tax the rich,” he wrote, reacting to Ocasio-Cortez’s tweet.
2:18 NDP push for ‘excess profits’ tax, Liberals say they raised taxes on wealthiest 1 per cent
NDP push for ‘excess profits’ tax, Liberals say they raised taxes on wealthiest 1 per cent – Oct 8, 2020
So far, the push has indeed forced some hedge funds to pull back and accept heavy losses. Citron Capital, a short-seller, is among those that confirmed they dropped their bets on GameStop shares. The man who runs Citron, Andrew Left, said on Wednesday that his company faced “a loss, 100 per cent.”
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GameStop stock surged to over $450USD a share on Thursday morning, but has since dropped to around $250USD — a massive jump from its cost just weeks ago. As the price continues to fluctuate, the standoff could end in many average traders losing the piles of money they’ve poured into the stock.
Singh said that while he “will not be giving anyone stock advice,” people should tread carefully.
“In terms of stock advice, I should not be giving anyone any stock advice. I think you should consult a professional and make sure you get professional advice,” Singh said.
“Be safe, be prudent, and make sure you make a good decision looking at all the evidence.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
