Why a crash in meme stocks AMC and GameStop looks more likely now

MarketWatch2021-06-17

Heavy insider selling is a warning sign that a stock’s price is inflated. Could insider sales of meme stocks signal a coming crash in their share price? The empirical research suggests the answer is ...

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Comments

Stonker
2021-06-18
Stonker
Fear mongering once again...GME is on its way to be included in Russell 1000 same league as Tesla Apple Google etc - this is the beginning of acceptance for its place amongst the business bellwethers as they take time to lay out their business blueprint...there were many naysayers when Amazon and Tesla made losses after losses for many quarters and years...oh look where they are now? Nothing to see...pls move on
睡神经病
2021-06-18
睡神经病
???
iamnickname
2021-06-17
iamnickname
I can’t wait for these people to eat their words and for people to wake up to how shitty and corrupted MSM really is once MOASS starts absolutely disgusting pigs
RyantKing
2021-06-17
RyantKing
What a joke
Kaikaitrade
2021-06-17
Kaikaitrade
Strong apes apes strong
POWGON
2021-06-17
POWGON
Hm... Has been saying for quite some time

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The empirical research suggests the answer is ...</p>\n\n<a href=\"https://www.marketwatch.com/story/why-a-crash-in-meme-stocks-amc-and-gamestop-looks-more-likely-now-11623810848?siteid=yhoof2\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AMC","symbol_name":"AMC院线","start_time":0,"source_url":"https://www.marketwatch.com/story/why-a-crash-in-meme-stocks-amc-and-gamestop-looks-more-likely-now-11623810848?siteid=yhoof2","article_id":"1133173445","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1133173445","pubTimestamp":1623899282,"columns":[],"sourceInfo":{"source_id":"market_watch","name":"华尔街大事件"},"weMediaInfo":null,"summary":"Heavy insider selling is a warning sign that a stock’s price is inflated.\n\nCould insider sales of me","collect":0,"end_time":0,"defaultTopTitle":"marketwatch.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AMC":"AMC院线","GME":"游戏驿站"},"translate_title":"为什么现在看来meme股票AMC和游戏驿站更有可能崩盘","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMC":0.9,"GME":0.9},"content_text":"Heavy insider selling is a warning sign that a stock’s price is inflated.\n\nCould insider sales of meme stocks signal a coming crash in their share price? The empirical research suggests the answer is yes.\nThe substantial stock sales by directors of GameStop GME, +0.21% and AMC Entertainment Holdings AMC, -6.54% didn’t surprise most rational investors. It’s clear that the current prices of these and other meme stocks are vastly inflated. In fact, investors should have seen AMC’s issuing new shares at its bloated price to raise capital as a warning sign.\nCritics might lambaste the opportunism of such insider selling, citing corporate governance gurus encouraging director ownership to align interests with public shareholders. But who can blame them? What is surprising is that more outside shareholders haven’t taken the signal to sell. It’s common for savvy investors to scan insider purchases and sales for signs of good or bad news ahead. Aggregate insider trading levels presage total stock returns for up to two years, according to the research of University of Michigan finance professor Nejat Seyhun, author of Investment Intelligence from Insider Trading.\nThat said, some insider trades contain no signal at all, as directors buy when required to maintain mandatory ownership levels and sell when they need cash or to diversify investments. Moreover, insiders face reputational and legal risks when trading, so are careful not to signal hoarding good or bad news, lest they veer into unethical or illegal insider trading.\nBut these meme-stock cases seem clearer. At AMC, for instance, many directors all sold around the same time in large numbers, near the company’s recent stock offering. Research by Durham University accounting professor Guanming He and colleagues indicates that the presence of concentrated insider stock-selling is associated with an increase in stock-price crash risk. That stands to reason: insiders know more than outsiders, whether investors, strategists or economists.\nOf course, no one can discern the fickle features of markets that precipitate reversals. But He’s research supports the view that insiders’ anticipation of future stock-price crash risk — from whatever source — does lead them to trim their holdings. In particular, the evidence is that insider sales are associated with 15-month-ahead crash risk.\nSuch research may be particularly meaningful in the bizarre context of meme stocks. Compared to conventional stock trading, insiders are poised to make greater profits trading meme stocks and their trades are more informative given the greater degree of noise trading by uninformed traders.\nResearch on past outcomes is no guarantee of future results, but together with common sense and an appreciation that all bubbles eventually burst, I’d be willing to place my own bets. The 15-month time frame would put the bursting of the GameStop bubble in the first quarter of 2022 and AMC around the third quarter. I’d certainly take both bets before I bought either stock.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":166619412,"gmtCreate":1624005587436,"gmtModify":1703826353604,"author":{"id":"3575285094262582","authorId":"3575285094262582","name":"Stonker","avatar":"https://static.tigerbbs.com/30eb7dc58172a5e840d654113620cc49","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"3575285094262582","idStr":"3575285094262582"},"htmlText":"Fear mongering once again...GME is on its way to be included in Russell 1000 same league as Tesla Apple Google etc - this is the beginning of acceptance for its place amongst the business bellwethers as they take time to lay out their business blueprint...there were many naysayers when Amazon and Tesla made losses after losses for many quarters and years...oh look where they are now? Nothing to see...pls move on","listText":"Fear mongering once again...GME is on its way to be included in Russell 1000 same league as Tesla Apple Google etc - this is the beginning of acceptance for its place amongst the business bellwethers as they take time to lay out their business blueprint...there were many naysayers when Amazon and Tesla made losses after losses for many quarters and years...oh look where they are now? Nothing to see...pls move on","text":"Fear mongering once again...GME is on its way to be included in Russell 1000 same league as Tesla Apple Google etc - this is the beginning of acceptance for its place amongst the business bellwethers as they take time to lay out their business blueprint...there were many naysayers when Amazon and Tesla made losses after losses for many quarters and years...oh look where they are now? Nothing to see...pls move on","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/166619412","repostId":1133173445,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":168758761,"gmtCreate":1623984579153,"gmtModify":1703825573648,"author":{"id":"3574824227783735","authorId":"3574824227783735","name":"睡神经病","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"3574824227783735","idStr":"3574824227783735"},"htmlText":"???","listText":"???","text":"???","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/168758761","repostId":1133173445,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":161725040,"gmtCreate":1623941299980,"gmtModify":1703824178136,"author":{"id":"3561453607729762","authorId":"3561453607729762","name":"iamnickname","avatar":"https://static.tigerbbs.com/8427d076988e90450fddb882a08fbbe5","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3561453607729762","idStr":"3561453607729762"},"htmlText":"I can’t wait for these people to eat their words and for people to wake up to how shitty and corrupted MSM really is once MOASS starts absolutely disgusting pigs","listText":"I can’t wait for these people to eat their words and for people to wake up to how shitty and corrupted MSM really is once MOASS starts absolutely disgusting pigs","text":"I can’t wait for these people to eat their words and for people to wake up to how shitty and corrupted MSM really is once MOASS starts absolutely disgusting pigs","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/161725040","repostId":1133173445,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":161242431,"gmtCreate":1623931578523,"gmtModify":1703823783249,"author":{"id":"3566422009404750","authorId":"3566422009404750","name":"RyantKing","avatar":"https://static.tigerbbs.com/21cb807f554e780c7da77b8008cbe145","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3566422009404750","idStr":"3566422009404750"},"htmlText":"What a joke&nbsp;","listText":"What a joke&nbsp;","text":"What a joke","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/161242431","repostId":1133173445,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":161259550,"gmtCreate":1623930531070,"gmtModify":1703823763452,"author":{"id":"3574154443904231","authorId":"3574154443904231","name":"Kaikaitrade","avatar":"https://static.tigerbbs.com/58d4aaf4c2c080e5c8c53b90a67fac93","vip":1,"crmLevel":1,"crmLevelSwitch":1,"authorIdStr":"3574154443904231","idStr":"3574154443904231"},"htmlText":"Strong apes apes strong","listText":"Strong apes apes strong","text":"Strong apes apes strong","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/161259550","repostId":1133173445,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":161226031,"gmtCreate":1623930031223,"gmtModify":1703823754055,"author":{"id":"3572395270903152","authorId":"3572395270903152","name":"POWGON","avatar":"https://static.tigerbbs.com/0f434116081b7609a6b51e9402a0ae47","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"3572395270903152","idStr":"3572395270903152"},"htmlText":"Hm... Has been saying for quite some time","listText":"Hm... Has been saying for quite some time","text":"Hm... Has been saying for quite some time","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/161226031","repostId":1133173445,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":49,"commentSize":38,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1133173445"}