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Superstonks, Crypto, And Discord: The Age Of “Gamified” Investment – Forbes

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A remarkable amount of focus has been injected into the world of investment through “gamification.” We witnessed the rise of “meme stocks” late in 2020, starting with GameStop (GME), which was famously driven by a swarm of daily investors found in an online Reddit forum and using the Robinhood trading platform. Holders that had short sale positions in this company felt the short squeeze as the situation dominated headlines. To the dismay of many, viral investments have not diminished as the GameStop saga continues and other financial vehicles have begun to see gamification push the boundaries of economic traditions. 

We have recently witnessed enthusiasm for GameStop surge again, especially in Discord chats and Reddit forums. The company has helped this surge with a bevy of tweets supporting the movement and teases regarding upcoming activities, allowing them to cash in on the frenzy. The crew decides whether to move towards a short squeeze and push the stock value as high as possible, and they speculate on when to do it. 

Since the initial run late last year, the share price was roughly $350 in January. By March, it was around $100, and most recently, the price has been around $200. It has been quite the rollercoaster ride. Showing no signs of slowing down, the video game retailer has benefited from some recent renewed positive news—the announcement of new managers, celebrity investors, corporate news and tons of press never hurts. 

AMC

The Reddit Revolution turned its attention to AMC Entertainment Holdings, Inc. (AMC), with small retail investors pouring into the stock. The stock surged nearly 100% in trading on one day alone, and it’s now up a whopping 2,650% year-to-date. The Reddit and Robinhood crowd has figured out how to overpower the algorithms on Wall Street through gamification. The Citadel algorithms control most of stock trading, and they have struggled to handle the thousands of orders that pour into select stocks from the Reddit and Robinhood crowds. Shamelessly, the AMC CEO sent an email to customers encouraging this frenzy by offering AMC stockholder free popcorn when they visit an AMC theater. 

Dogecoin

GameStop and AMC were not the only seemingly farcical force of alternative investments to witness gamification. Ample interest in the cryptocurrency Dogecoin has been propelled by forces in the Reddit sphere, including activity involving Tesla billionaire Elon Musk. “Superstonk” is the word in this world, alluding to inside efforts to corner and create gamified runs on favorite stocks. Dogecoin has this same sort of momentum, with investors coming out of multiple walks of life. Superstonks rank big on social media engagement, including other crypto topics such as NFTs, Bitcoin, and other alternative coins. 

FOMO in Effect

The Fear of Missing Out, referred to as FOMO, is one of the predominant effects felt in these markets. The direction of the wind carries early and active investors into profitable territory and there appears to be no end in sight. It seems nobody wants to be on the sidelines without making some profit, and the entire channels are heavily in the space of gamified investment. However, if you have been sitting on the sidelines, it is hard to blame you. These are perilous, very real investment situations that have true financial implications. Turning that over to the impetus of an online mob can be very disconcerting. Even worse if that mob is nothing but a zombie army of fake accounts and bots. The power of these investments and the future of these investors is in many ways in the hands of a mobile base of users. Faceless and difficult to quantify, the audience that participates in these investments is somewhere active in the game or on the sideline, waiting for the right time to make their next move. Some investors appear to be fearful of massive pump-and-dump operations and others cannot help themselves, they jump right in. 

The Dark Side

I have delved into the dangers that can come from losing touch with reality. While there is nothing wrong with gamifying stocks and investments, there are inauthentic actors out there attempting to manipulate these volatile markets. Not only are individuals seeking to manipulate in order to gain financially, but automated bots from international and domestic sources are orchestrating fake emotions in any number of pop-investment vehicles. It’s a massive vulnerability. 

Time to Bring Lack of Authenticity into Check

It is difficult to ascertain safety and authenticity when engagements on many platforms are completely anonymous and unauthenticated. Bots and bot-based activity are a significant threat to not only the personal privacy and security of the average person, but also the valuation of well-known companies like GameStop and AMC. There seems to be a lack of will by companies like Facebook, Twitter, and Reddit to put a firm stop to the ability of creating numerous anonymous accounts for the sole purpose of creating a false frenzy, and biasing the “game.”

The impact of an inauthentic audience can be minimized by implementing strict multi-factor authentication and stricter policies that are focused on implementing one identity per validated user. While gamification is a welcome and entertaining notion even in the realm of online investment, there is an opportunity for responsible applications in the marketplace that do a better job of vetting individual accounts and incentivize behaviors in other veins of gamification such as rewards programs, loyalty and social credit.

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Guardian Capital picks 60% stake in Rae & Lipskie Investment Counsel – Private Banker International

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Guardian Capital Group has signed a deal to acquire a 60% majority interest in the Ontario-based private wealth manager Rae & Lipskie Investment Counsel (The RaeLipskie Partnership).

Financial terms of the agreement were not disclosed. The deal is expected to close in the third quarter of this year, subject to regulatory approvals.

Current employees of The RaeLipskie Partnership will retain the remaining 40% ownership interest in the firm. It has assets under management (AuM) of over C$1.1 bn.

Guardian president and CEO George Mavroudis said: “We’re delighted to partner with such a well-respected firm and management team as we continue to grow our presence in the private client wealth space.

“This transaction will add over $1bn in assets under management to our Private Wealth segment and further extend our regional coverage in key markets.”

The RaeLipskie Partnership president and COO Brian Lipskie added: “Like Guardian, we have always believed in serving our clients with a customer-first and community-based approach to everything we do. We look forward to continuing to do so, but with the added strength and stability that comes from partnering with Guardian.”

Founded in 1962, Toronto-based Guardian specialises in wealth and investment management.

The firm provides a range of investment management solutions to institutional and private wealth clients through its subsidiaries and offers wealth management services to financial advisors in its national mutual fund dealer, securities dealer and insurance distribution network.

As of 31 March 2022, the firm had C$53.1bn of assets under management and C$30.5bn of assets under administration. It also managed a proprietary investment portfolio with a fair market value of C$741m at end of this March.

Last year, Guardian concluded its previously announced takeover of BNY Mellon’s wealth management and advisory services unit in Canada.

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Toronto investment bank Origin Merchant Partners to acquire Chicago advisory firm – The Globe and Mail

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Toronto-based investment bank Origin Merchant Partners is expanding into the U.S. market by acquiring Chicago-based InterOcean Advisors, creating a firm with more than 40 bankers in five cities.

Origin and InterOcean advise mid-sized public and private companies on mergers, acquisitions and raising capital, and are among a number of boutique investment dealers created in recent years by veterans of larger banks or professional services firms. The two employee-owned firms worked together on a number of cross-border transactions prior to merging.

“We are excited to join forces with InterOcean,” Jim Meloche, Origin’s managing partner, said in a press release. “With its deal and sector expertise, coupled with an extensive network of industry and capital provider relationships, the InterOcean team will enable us to better serve our US and Canadian clients across a range of sectors.”

M&A investment bank Origin Merchant Partners expands into Quebec

Two former leaders of Ernst & Young’s corporate finance team for automotive, building products and other industrial clients – Bill Doepke and Bob Wujtowicz – founded InterOcean in 2006. They named the firm after a Chicago business newspaper launched in the 1800s with a “pro-American industry stance” that became a touchstone publication for readers across the U.S. Midwest. Both founders are joining the merged firm.

Going forward, the company will be known as Origin, with offices in Toronto, Montreal, Chicago, Atlanta and Denver. The two investment banks did not release financial terms of the transaction.

Last year, Origin welcomed veteran investment banker Darren Williams as a principal in its Toronto office. He also began his career at E&Y, then went on to become an adviser to industrial companies and leader of the team that covers the sector for Origin. Mr. Williams said: “The combination of our capabilities will expand on the benefits we bring to our industrials clients, deepening our talent pool and growing our network of key relationships in the sector.”

Over the past two years – during the COVID-19 pandemic – Origin and InterOcean have completed more than 25 transactions, advising entrepreneurs and companies on divestitures, acquisitions and capital raising.

Boutique advisory firms such as Origin have successfully pitched their services as conflict-free alternative to bank-owned investment dealers, which earn fees from lending and underwriting equity offerings along with providing advice on transactions. A number of Origin’s founders started their careers at the investment banking arm of CIBC, then moved to independent dealers.

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Investment platform Qooore rebrands as Qure.Finance – Private Banker International

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Investment platform Qooore, which touts itself as a social investment platform for Gen Z, has rebranded as Qure.Finance.

Subsequently, the firm also launched paper trading in its iOS app to allow users to carry out risk-free trades based on insights from “finfluencers”.

Qure.Finance will also allow users to practice trading approximately 10,000 securities, including US stocks and ETFs, as well as more than 20 cryptocurrencies such as Bitcoin and Ethereum.

The firm will provide each user with $100,000 in virtual money that they can be used to make simulated trades on its app based on real-life market quotes.

The move is expected to help users enhance their trading skills without risking their money or paying fees.

Qure.Finance CEO Igor Sheremet said that paper trading will help to enhance both the financial literacy and trading skills of the community.

 Sheremet said: “Today marks a new chapter in our company’s development, as we launch paper trading under our new brand name.

“Thanks to paper trading, our users will not only be able to receive trading insights from leading content creators, but also test them out in real life, free of charge, with no financial risks attached – all within a sleek and user-friendly interface.

“We are making investing solutions more accessible to everyone, regardless of their level of skills or financial resources.”

The company plans to paper trading functionality for Android users in the coming months.

The San Francisco-based firm was founded in 2020 to provide social-media style trading insights from global financial influencers to young investors.

This April, women-focused robo advisory platform Ellevest secured an investment of $53m in a Series B funding round to expand its offerings and product solutions.

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