Archive for Will Daniel

Cathie Wood bought more than 3 million shares of the self-driving truck company TuSimple on its IPO yesterday – and the stock is struggling

TuSimple_Truck_1
A TuSimple Truck.

Cathie Wood bought more than 3 million shares of the self-driving truck company TuSimple Holdings on its public debut Thursday.

The San Diego, California-based firm saw its stock struggle in its first day on the open market, trading down as much as 19% before recovering to break even at $40 for the day. Shares debuted on the Nasdaq under the ticker "TSP," and traded another 6% lower on Friday.

Wood's flagship fund, the ARK Innovation ETF, picked up 2,350,496 million shares of the self-driving truck maker during the volatile day of trading.

The ARK Autonomous Technology & Robotics ETF also added some 728,536 shares of TuSimple.

The combined holdings of both ETFs were worth over $123 million as of Thursday's closing price.

TuSimple raised $1.35 billion in its IPO this week, selling almost 34 million shares for $40 each. At that price, the firm is valued at nearly $8.5 billion.

TuSimple is the perfect thematic addition to Cathie Wood's active exchange-traded funds due to its focus on autonomous driving, but the company is yet another unprofitable holding for Ark Invest.

Last year, TuSimple posted a net loss of $178 million on revenue of just $1.8 million, according to the firm's S-1 prospectus.

TuSimple was founded by Dr. Xiaodi Hou, a renowned expert in computer vision software from the California Institute of Technology, in 2015.

The company raised over $648 million in seed funding before going public from big-name investors like Volkwagen Group, Goodyear Ventures, and Navistar, per Crunchbase.

The firm also counts UPS and the US Postal Service as backers.

The release of TuSimple's self-driving trucks isn't expected until 2024, however, meaning losses at the firm will likely continue in the neat term.

TuSimple uses lidar technology supplied by Aeva Technologies, which went public on March 15. The company hopes to improve efficiency and safety in trucking while lowering costs and reducing the carbon footprint of the industry.

It has created an "Autonomous Freight Network (AFN)" that stretches from Phoenix to Houston with the goal of "allowing freight to be moved from point to point safely and reliably using autonomous trucks."

Shares of the autonomous trucking company fell 6.1% to $37.55 on Friday as of 9:28 a.m. in New York.

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David Einhorn says Chamath Palihapitiya and Elon Musk were the ‘real jet fuel’ for the GameStop short squeeze – and that regulators have been defanged when it comes to policing markets

elon musk bernie sanders space
  • Greenlight Capital's founder David Einhorn took shots at Elon Musk and Chamath Palihapitiya in his quarterly investor letter published Thursday.
  • Einhorn said securities laws surrounding stock manipulation "don't apply" to Musk.
  • The hedge fund manager also said Palihapitiya's GameStop tweets and options trades may have helped him "harm a competitor" in Robinhood.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

GreenLight Capital's David Einhorn believes billionaires Chamath Palihapitiya and Elon Musk were "the real jet fuel" for the GameStop short squeeze and that regulators have been defanged when it comes to policing markets.

In a letter to investors released on Thursday that discusses his firm's first-quarter results, Einhorn ripped into Chamath Palihapitiya, Elon Musk, and US securities regulators.

Einhorn said there's "no cop on the beat" to regulate equities these days and argued "quasi-anarchy appears to rule" the markets.

"Many who would never support defunding the police have supported - and for all intents and purposes have succeeded - in almost completely defanging, if not defunding, the regulators," Einhorn wrote.

Einhorn added that he believes the GameStop short squeeze that occurred at the start of 2021 was fueled in large part by billionaires Chamath Palihapitiya and Elon Musk.

"We note that the real jet fuel on the GME squeeze came from Chamath Palihapitiya and Elon Musk, whose appearances on TV and Twitter, respectively, at a critical moment further destabilized the situation," Einhorn wrote.

The GreenLight Capital founder said Palihapitiya may have had an incentive to harm his competitor Robinhood when he tweeted out "let's goooooo!!!!" after buying February $115 calls on shares of GameStop back on January 26.

"Mr. Palihapitiya controls SoFi, which competes with Robinhood, and left us with the impression that by destabilizing GME he could harm a competitor," Einhorn wrote.

Read more: BTIG identifies 14 beaten-down stocks poised to dominate the market this earnings season and extend their track record of crushing expectations

Palihapitiya did donate all of his gains in GameStop and the initial capital for the investment to Barstool founder Dave Portnoy's charity, but the billionaire was active in defending the Reddit trader movement that pushed GameStop shares higher.

Palihapitiya appeared on CNBC on January 27 and said the GameStop phenomenon was an example of individual investors pushing back against the Wall Street establishment.

Einhorn went even further with his critiques of Elon Musk in his letter to investors.

The GreenLight Capital founder said that if regulators wanted Elon Musk to stop manipulating stocks, they should have hit him with more than a "light slap on the wrist when they accused him of manipulating Tesla's shares in 2018."

"The laws don't apply to him and he can do whatever he wants," Einhorn added.

Einhorn also said Michael Burry's exit from Twitter after the SEC visited him at his home was an example of his decision to "stop publicly speaking truth to power."

The fund manager's quotes about GameStop certainly stick out, though the fund's performance is also noteworthy for its loss in the quarter. Einhorn's funds returned -0.1% in the first three months of 2021, compared to a 6.2% return for the S&P 500 index.

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Dave Portnoy-backed Buzz ETF adds GameStop, Palantir, and Chewy in monthly rebalancing

GameStop store New York City January 2021.JPG

The Van Eck Vectors Social Sentiment ETF (BUZZ) added 21 stocks to its holdings and dropped 21 others in its monthly rebalancing on Thursday.

Big-name additions included GameStop, Palantir, Ryan Cohen's Chewy, Rocket Companies, Nike, Visa, and Starbucks.

Top stocks dropped from the ETF included Nikola, Fastly, Etsy, Dropbox, and Twilio.

The BUZZ ETF, famously backed by Barstool Sports' Dave Portnoy, tracks the performance of 75 large-cap US stocks that exhibit the most positive investor sentiment on online sources like social media, news articles, and blog posts.

The ETF's top holdings, representing more than 15% of total net assets, include big tech giants like Apple, Amazon, Square, Nvidia, and Tesla.

"The April rebalance is one of the more active in recent months," said Jamie Wise, the founder of Buzz Indexes. "The sentiment shifts are notable and diverse, reflective of the heightened level of investor discussion across social platforms."

GameStop recently met eligibility requirements for the ETF by hitting a $5 billion market cap.

Read more: BTIG identifies 14 beaten-down stocks poised to dominate the market this earnings season and extend their track record of crushing expectations

Van Eck has made it clear in interviews that its ETF is not just a place for "meme stocks," but this month's rebalancing showed that multiple top Reddit trader favorites made the cut.

GameStop, Rocket Companies, Palantir, and Chewy have all been popular on Reddit's Wall Street Bets platform at one time or another.

The Buzz ETF, launched on March 2, now boasts over $400 million in total net assets. However, performance has lagged behind the S&P 500: Total returns are negative 3.4% over the lifetime of the exchange-traded fund.

The social-sentiment ETF has had plenty of competition since going public. It's one of about 100 ETFs that have made public debuts in 2021, according to data compiled by Bloomberg - the most public debuts by ETFs in over a decade.

Here's the full list of the ETF's April additions and departures:

Buzz etf adds
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AMD could rise 19% due to its durable technical advantage over Intel, Raymond James says

AMD CEO Lisa Su
AMD CEO Lisa Su

Raymond James initiated coverage on Advanced Micro Devices (AMD) with an "outperform" rating and a $100 price target on Thursday.

The price target represents a potential 19% jump from Thursday's intraday highs.

In their note to clients, analysts led by Chris Caso cited AMD's "durable technical advantage" over Intel and growing server business as key reasons for their bullish view.

The analysts said that Intel's decision to stick with internal manufacturing has cemented AMD's technology lead through 2024 and that the stock's recent pullback is a buying opportunity.

"We think the stock's pullback has been driven by improved sentiment that Intel will solve their manufacturing challenges, which will reverse AMD's successes. We're taking the other side of that view," Caso and his team wrote.

"Now that Intel has committed to internal manufacturing, we think it's unlikely that Intel ever regains a transistor advantage vs. AMD," Caso added.

Intel announced last month it would double down on its in-house chip manufacturing business with plans to spend $20 billion on two new Arizona factories. The Santa Clara, California-based firm also plans on opening up its chip foundries to other companies so they can build their own designs.

The move came after VMWare's Pat Gelsinger took over as CEO in January.

Raymond James analysts explained how Intel's move to stick with its 7 nanometer(nm) process for internal manufacturing while AMD is moving to Taiwan Semiconductor's 5nm process next year-and likely to 3nm by 2024-is a big problem for the firm.

According to the analysts, the decision means AMD will hold a transistor advantage over Intel for at least the next three years.

Caso and his team also discussed cloud market share growth in their note to clients, calling it an important driver for AMD moving forward.

The analysts said the launch of AMD's 'Milan' chip for data centers represents the firm's first move into the enterprise server market and that a number of server OEMs are launching AMD designs for the first time this year. The team of analysts expects 59% year-over-year growth in the segment.

As far as risks to AMD's rise, Raymond James said a slowdown in PC sales could hurt revenue growth and that they "believe pandemic PC purchases pulled forward demand for several years."

However, the investment bank's analysts noted that AMD's increasing market share of PC sales and enterprise servers will mitigate much of the demand drawdown.

Finally, Raymond James expects 2022 earnings per share to hit $2.81, 12% ahead of the Street's consensus estimates. The analysts used a ~36x multiple on their 2022 EPS estimate to reach their $100 price target.

The team said they believe much of the bear case around AMD is due to fears of Intel's resurgence, but they "don't expect there to be much to catalyze those fears for a long while."

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2021 has seen the weakest start to central bank gold buying in over a decade, the World Gold Council says

CME Gold

2021 has been a bad year for gold lovers. The precious metal is down more than 8% year-to-date while digital alternatives like bitcoin continue their historic run.

To add to gold bulls' woes, data from the World Gold Council shows central banks being net sellers of gold in 2021, offloading 16.7 tonnes.

Central banks did add 8.8 tonnes of gold to their reserves in February, with notable buyers including India (11.2 tonnes), Uzbekistan (7.2 tonnes), and Kazakhstan (1.6 tonnes), but overall, 2021 has been the weakest start to central bank gold buying in over a decade.

Many major gold miners have also seen their stocks underperform this year. Two of the largest publicly traded gold miners, Barrick Gold and Newmont Mining, are down roughly 15% and 2%, respectively.

That's compared to the S&P 500's more than 11% jump since the beginning of the year.

Bank of America analysts said in a note to clients in February that there have been signs of "fading" demand in the gold market for some time due to a "lack of interest from investors" in buying physical gold.

The bank's analysts also noted Jewelry sales have been "disappointing" due to softness in demand from key regions like India thus far in 2021.

BofA isn't the only bank to back away from gold either.

UBS Wealth Management told its clients that gold will struggle to attract sufficient ETF inflows to sustain prices north of $1,900 in January.

The wealth management team added that they believed gold would likely fall to around $1800 per ounce by the end of 2021.

Since then, gold prices have fallen even more dramatically than UBS predicted. The precious metal is down 11% from 2021's high of $1,949 per ounce to around $1,730 per ounce.

The UBS team said given gold's weakness, silver, platinum, and palladium are the precious metals of choice for investors in 2021.

"We advise investors with an elevated risk appetite to be long platinum and palladium," UBS analysts wrote.

Of course, not every bank is bearish on gold's prospects. Both Goldman Sachs and Citibank see gold prices returning to $2,000 or higher in 2021 due to a weakening US dollar.

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Lumber prices could climb another 12% this year after hitting a record high in April, Piper Sandler strategist says

Logging facility, Vermot
A logging facility in Bristol, Vermont.

Piper Sandler's Craig W. Johnson, CFA, CMT said he believes Lumber prices could "very easily" move above $1,300 per thousand board feet this year even after notching a record high in April.

That figure represents a 12% increase from Tuesday's closing price of $1,154 per thousand board feet. Lumber prices have soared more than 250% in the past year alone.

In an interview with Insider, Johnson, a technical research market strategist, said that lumber prices have broken out of a "huge consolidation" that occurred from 2018 through 2020 and are set to soar amid the economic reopening.

Based on technical analysis, Johnson sees lumber prices continuing to rise to at least $1,300 over the next six to nine months.

The strategist noted that there is an enormous demand for housing and renovations that's pushing lumber prices higher.

Johnson said that with interest rates as low as they are, there's an overall sense that this is the lowest mortgage rate many people are ever going to get.

As a result of these low mortgage rates, a new work-from-home trend, and young people moving out of cities, home buyers are lapping up properties at historic rates, and that's putting pressure on lumber supply.

Johnson also said that timber companies are struggling to catch up with demand after shutting down some of their operations during the pandemic.

The technical research strategist added that, based on what he's been reading, timber companies won't be putting more sawmills in place to meet demand either because they lack the economic incentive to add capacity.

Creating more sawmills is a capital-intensive process that requires producers to get permits, and that can't be done quickly.

Johnson also said the upcoming hurricane season could exacerbate the lumber price issue by adding to demand.

When asked what could stall rising lumber prices, Johnson said that only the slowing of economic activity would cause prices to fall, but noted that right now he believes that's unlikely as we are in the "great wide open" for economic growth post-pandemic.

Lumber traded up 2.7%, at roughly $1,212, as of 12:04 p.m. ET on Wednesday.

Watch it trade live here.

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Coinbase’s eye-popping $100 billion valuation is reasonable for a disruptive, cutting-edge crypto firm, an early backer says

puppies in the Coinbase office
  • Santosh Rao, the head of research at Manhattan Venture Partners, believes a $100 billion valuation for Coinbase is reasonable.
  • Manhattan Venture Partners was an early investor in Coinbase, Palantir, Draft Kings, and more.
  • Based on estimated 2022 figures, Coinbase will trade at around 11x sales and 27x EBITDA with a $100 billion valuation.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Coinbase is set to make its public trading debut on Wednesday and some market commentators are questioning its lofty valuation. Manhattan Venture Partners, an early backer of the crypto exchange, believes the massive figure is justified.

Santosh Rao, the head of research at the merchant bank, says a $100 billion valuation for Coinbase is "totally reasonable" given the disruptive nature of the crypto firm.

Manhattan Venture Partners was an early investor in Coinbase as well as a number of other big-name tech companies like SpaceX, Palantir, and Draft Kings.

Rao sat down with CNBC on Wednesday to discuss Coinbase's public debut and his firm's investments.

The head of research highlighted the fact that based on estimated revenues and earnings for 2022, at a roughly $100 billion valuation, Coinbase will trade at just over 11x sales and 27x EBITDA.

Those figures aren't outlandish for a company that has demonstrated consistent growth, according to Rao.

Coinbase released impressive first-quarter results on April 6 that showed a 117% quarter-over-quarter increase in monthly transacting users. The company also earned more revenue in the first quarter of 2021 ($1.8 billion) than it did in all of 2020 ($1.3 billion).

The rising revenue came amid a historic run for bitcoin that saw the cryptocurrency rise more than 300% in 2020, and an additional nearly 100% in the first quarter of 2021 alone.

Some market commentators are predicting a further 10%+ breakout moving forward as well.

When asked whether crypto prices need to keep going higher in order for Coinbase to maintain its lofty valuation, Rao said it would help, but argued the company has a range of services on offer to offset any downfall in crypto prices.

"That's their core business at this point, but they have other services too. And they have a subscription product coming up, a whole range of services, the custody services, they have a number of other levers to pull as they go up," Rao said.

Read more: Bitcoin is a headache to store, and that's created an investment opportunity that could theoretically pay determined traders big risk-free returns by December

The head of research added that, in his view, there's no reason why crypto prices should stop going up as investors are starting to realize the space will become "an integral part of the financial system going forward."

Rao also noted that of the best features of Coinbase is that it's "agnostic" towards individual cryptocurrencies, meaning if bitcoin falls and other cryptocurrencies rise, Coinbase will still benefit.

The head of research at Manhattan Venture Partners ended the interview by saying that Coinbase has the breadth, scale, and technology to keep competitors at bay over the long haul.

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An influencer stock market will allow you to buy crypto coins tied to the reputation of icons like Elon Musk, Chamath Palihapitiya, and Justin Bieber

Bitclout
Elon Musk's account on BitClout.

An influencer stock market called BitClout is allowing investors to buy crypto coins tied to the reputation of icons like Elon Musk, Chamath Palihapitiya, Justin Bieber, and more.

The goal of the platform is to create a token-based, decentralized social media marketplace where traders can engage in normal Twitter-like discussions while also profiting off the reputation and influence of the rich and famous.

Just like non-fungible tokens made a digital art marketplace accessible to all, BitClout hopes to make a marketplace out of people's reputations.

Transactions on the site are executed using BitClout's own crypto coin, which traders swap bitcoin to hold.

Elon Musk's creator coin is currently going for over $70,000 on the BitClout site, more than the base price of a brand new Tesla Model S.

Chamath Palihapitiya's coin is also selling for top dollar at over $33,000, while Justin Bieber's coin is relatively cheaper at just over $19,500.

There are also creator coins for thousands of public figures and stars like Snoop Dogg, Ariana Grande, Joe Rogan, and even the digital artist Beeple on the platform.

Investors in BitClout include big names like Sequoia Capital, Coinbase Ventures, Andreessen Horowitz, and Chamath Palihapitiya's Social Capital, according to reports from TechCrunch, citing the startup's anonymous founder who calls himself "Diamondhands."

The only public name tied to BitClout is that of Princeton alum Nader Al-Naji, who raised $133 million for his first start-up, Basis, which went belly up due to tightening US securities regulations.

Now it seems Al-Naji is again facing legal hurdles at BitClout after the firm pre-populated its BitClout network with 15,000 accounts using information from popular public Twitter profiles before going live last month.

Brandon Curtis, the product lead for the decentralized token exchange Radar Relay, filed a lawsuit against BitClout for using his likeness without consent on March 23 saying in a Tweet that BitClout was "using bitcoin's aesthetic to raise VC funding to carry out unethical and blatantly illegal schemes."

BitClout isn't just facing a lawsuit. Some have questioned the security of the platform because BitClout's bitcoin holdings, which typically are secured on the blockchain, are held privately in servers, NY Mag reported.

BitClout responded to recent security rumors on Twitter saying, "a rumor has been going around that BitClout is insecure. Just wanted to say this is untrue full-stop. The dev community completed multiple audits specifically around seed phrase handling prior to launch, and the nodes have been running since last year without issue."

Despite the legal and security concerns, BitClout has continued to gain traction with consumers. The platform is filled with users touting their personal "market caps" and the revolutionary nature of BitClout.

The platform even attracted Jordan Belfort, the famed "Wolf of Wall Street" portrayed in the 2013 film by Leonardo Dicaprio.

Belfort owns almost a quarter of his own creator coin and spends his time on the platform writing posts that pump his holdings, like this one from Tuesday where Belfort says "hopping in on my coin is like Jumping on Floyd Mayweather on fight night in Vegas."

Only time will tell if BitClout is just another vehicle for speculation or if the company can surmount legal and security challenges and become what VC investors like Chamath Palihapitiya hope is the next crypto darling.

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Lumber prices hit a record high after soaring more than 250% in the past year

British Columbia Lumber
  • Spot lumber prices hit a record high of nearly $1200 per thousand board feet on Tuesday.
  • Prices have soared more than 250% in the past year alone.
  • Rising lumber costs added more than $24,000 to the price of the average new single-family home.
  • Watch Lumber trade live here.

Spot lumber prices hit a record high of nearly $1200 per thousand board feet on Tuesday.

The record mark comes after a historic run for lumber in 2020 and the beginning of 2021. Prices have soared more than 250% in the past year and roughly 348% from March 30, 2020 five-year lows.

The rising lumber costs have added more than $24,000 to the price of the average new single-family home, and nearly $9,000 to the price of a multifamily home in the past year alone, according to data from the National Association of Homebuilders.

Sales of newly built, single-family homes also fell 18.2% in February, partly due to lumber costs, according to newly released data from the US Department of Housing and Urban Development and the Census Bureau.

Lumber's rise hasn't been all bad news for the markets, however. As a result of rising lumber prices, shares of timber companies have surged in the past six months.

Vancouver-based Canfor saw its stock jump some 107% during the period while shares of West Fraser Timber and Weyerhaeuser jumped roughly 80% and 30%, respectively.

A number of factors have combined to create the perfect storm for rising lumber prices over the past few years, starting in 2019 when weak demand and severe weather conditions caused timber suppliers to close mills and reduce output.

"In North America, lumber demand was impacted by severe weather early in 2019...tepid demand, combined with excess inventory levels heading into 2019, resulted in significant downward pricing pressure throughout most of the year," Canfor's management wrote in a 2019 statement to investors.

"In response to the muted demand and elevated log costs in BC, a number of temporary and permanent sawmill curtailments were announced across the industry throughout 2019," management added.

Then in 2020, interest rates were cut and demand for new homes and lumber soared due to the new stay-at-home dynamic.

A plague of pine beetles in British Columbia also destroyed enough trees to build millions of single-family homes throughout the year, Bloomberg reported.

All of this led to a supply and demand imbalance which has caused a sustained rise in lumber costs.

Devin Stockfish, the CEO of Weyerhaeuser, said last month he expects lumber prices will remain elevated "for the foreseeable future," per Bloomberg.

The National Association of Homebuilders has been pressing the Biden administration, federal agencies, and Congress to step in and address lumber supply shortages.

The association sent a letter to President Biden in late January after his election and has since lobbied Congress, Agriculture Secretary Tom Vilsack, and the US Forest Service in hopes of breaking the lumber pricing trend.

So far though their efforts haven't been fruitful and lumber prices continue to rise.

Read more: Investing legend Joel Greenblatt averaged 50% annual returns over 10 years. He told us his strategy for individual investors to find 'creative' opportunities in an increasingly crowded and ever-changing market.

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Philosopher Slavoj Žižek says Wall Street Bets’ GameStop squeeze was revolutionary because of how it focused on deliberately creating chaos, rather than anything fundamental

Slavoj Zizek
  • Slavoj Žižek says the GameStop short squeeze was revolutionary because it didn't focus on fundamentals.
  • Žižek is a political philosopher who holds positions at the University of Ljubljana and the University of London.
  • Žižek said he sees parallels between a recent presidential campaign slogan "corruption for everybody" and the GME saga.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Slavoj Žižek joined Bloomberg's "Odd Lots" podcast with Joe Weisenthal recently to discuss the r/wallstreetbets GameStop saga and his essay for the Spectator titled "Corruption for Everybody."

Žižek, a researcher at the Department of Philosophy of the University of Ljubljana and the international director of the Birkbeck Institute at the University of London, is known for his cultural critiques and communist beliefs.

The Slovenian-born political philosopher has long been a staunch critic of capitalism, and in his latest interview, he once again hits at a central issue of the system: corruption.

Žižek normally doesn't involve himself in stocks or the market, but the philosopher said the populist logic in the GameStop movement drew him in.

Žižek sees parallels between the GameStop short squeeze phenomenon and a Presidential campaign by the Croatian movie director Dario Jurican in 2019, wherein Jurican used the slogan "corruption for everybody."

The philosopher says that the campaign promised normal people would get to profit from cronyism, and although voters knew it was a joke, there was significant support for the campaign.

Reddit's r/wallstreetbets is a similar phenomenon, according to Žižek.

"We are in a situation in which Wall Street, the model of corrupt speculation and inside-trading, always by definition resisting state intervention and regulation, now opposes unfair competition and calls for state intervention," Žižek wrote in "Corruption for Everybody."

"In short, wallstreetbets is doing openly what Wall Street has been doing in secret for decades," Žižek added.

In Žižek's mind, the GameStop phenomenon was revolutionary because it focused on creating chaos in the markets and giving the power of "corrupt speculation" to the retail trader.

Reddit traders' investments in GameStop weren't based on anything fundamental, in Žižek's view. Instead, the traders' goal was to band together and bring about a "truly populist capitalism" with the power of "corruption" going to the people.

"The basic idea is, 'we don't care what really goes on at GameStop, or if they have a certain new product or whatever. We just want to show the market that success is not the reality of production but the enigmatic character of our act,'" Žižek said.

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