And that’s what Chainge stands for.
Billionaire tech investor Chamath Palihapitiya announced in a live interview on CNBC in January of this year, that he closed out his position in GameStop.
The CEO of Social Capital and former Facebook exec posted a tweet saying that he was buying $125,000 worth of $115 GameStop call options after asking his followers what to buy and to convince him to do so himself. (Calls are derivatives that give the buyer/seller the right to purchase/sell a stock at a set price. The trader makes money when the stock rises above the strike price) GameStop stock opened at $354 per share, up more than 1,550% this year alone.
Chamatch said what happened with the whole GameStop frenzy, and other stocks like AMC, is not just a trading story — it’s actual individual investors pushing back against the Wall Street establishment.
Palihapitiya also defended the power of individual investors to compete with Wall Street hedge funds.
He continued to say that he ended up closing his position and announced he is taking all the profit that he made plus his original position — $500.000 and will donate it to Barstool’s small business fund.
Palihapitiya was very harsh and dismissed Wall Street criticism about how individual investors are uniting on social media — particularly the wallstreetbets Reddit message board, and short-squeezing GameStop stocks like professionals do — as hypocritical. He said hedge funds have as their mission to try and push stocks around all the time.
Why shouldn’t a gathering of regular people be able to do the same?
“Instead of having ‘idea dinners’ or quiet whispered conversations amongst hedge funds in the Hamptons these kids have the courage to do it transparently in a forum,” he said. “What it proves is this retail [investor] phenomenon is here to stay. There are 2.7 million people inside wallstreetbets. I think they are as important as any hedge or collection of hedge funds.”
To begin with, the reason GME shares have skyrocketed is because this stock was 140% shorted by institutions. On what basis can it be shorted 140%? Where did this extra 40% come from? If it wasn’t for Wall Street institutions using tools that retail investors can’t use every day, how could the extra 40% have been caught short by retail investors?
Palihapitiya added that the research done by retail wallstreetbets investors on stocks can be just as good as the research done by Wallstreet: “That edge is gone. Now all of a sudden, retail can be on the same footing and they don’t have to be the ‘bag holder’ to Wall Street.”
Palihapitiya also made an interesting observation regarding this new trend: GameStop’s rise looks a lot like Tesla’s boom — meaning individual investors won out while skeptical institutions were proved wrong.
Tesla’s share price has exploded more than 700% over the past year and over 13,000% since it went public in 2010, far outpacing the market as a whole and consistently demolishing Wall Street’s expectations. Along the way, many Wall Street analysts were left scratching their heads. (Others have thrown in the towel and acknowledged they got it wrong.)
“Let’s look at Tesla. Who was right on Tesla? I’ll tell you who was right: every single retail investor. I was right. Elon Musk was right,” Palihapitiya said. “Let me tell you who was wrong: every single hedge fund. Name after name, when it comes to innovation, when it comes to growth, when it comes to people trying to do fundamentally useful things in the world, if it doesn’t fit into the mold that Wall Street wants, they try to organise against it.”
So, hedge funds are only open to titian investors and not to retail investors, and now the giants are dissatisfied with the money they make and want to restrict retail investors. Now why is that?
Palihapitiya also pushed back against the notion that it was irresponsible for him and other day traders to pump up GameStop’s stock. Instead, Palihapitiya sees the frenzy as an act of defiance against goliath institutional investors who typically hold the stock market’s reins.
“The point is: Just because you’re wrong, it doesn’t mean you get to change the rules,” Palihapitiya said. “Especially when you were wrong, you got bailed out the last time. That’s not fair.” (here particularly referring to Melvin Capital, reddit’s enemy #1, who has lost 50% of its value in January thanks to this bet alone. BUT they got a 2 billion dollar loan from competitors to stay afloat)
Palihapitiya described the trade as a true learning experience, as he had a front row seat to the thought process of many retail investors who have been congregating on Reddit’s WallStreetBets forum.
To conclude, Chamath was extremely impressed by both the initiative and the power of organisation that the retailers group proved, arguing that the fundamental analysis done by individuals proved to be just as efficient as hedge fund managers.
Where does Chainge stand?
Chainge stands and always will stand by the people. By the individuals who can see true potential and unite for the greater good. Because we believe in the power of a common goal, upheld not by the giants, but by the many.
And that’s why with Chainge, there is no possibility of writing options more than 100%, which is bulletproof guaranteed by code.
Furthermore, there is absolutely no institution that could restrict trading in the name of investor protection — because options are being traded in a fully decentralised way.
With the Chainge app, writing options is no longer the privilege of institutions. Anyone can write options with the specific token they hold (anytime, anywhere) in a decentralised way.
Plus, there is no counter party risks for exercising options, since we allow everyone to exercise the option in a decentralised way. And no one can change that. No matter how big or powerful. Thus, the true power, lies in the hands of the everyday user. Which is our main goal and purpose.
We are in the process of building a fair market, with equal opportunities for all. And one of the best things about it is that it will be accessible to anyone, at any time, from anywhere.
Why? Simple: Because we believe this is the future of finance.
The future it deserves. The future YOU deserve.
Data source: www.CNBC.com