“Rise and rise again until lambs become lions,” runs an oft-quoted line from the 2010 film ‘Robin Hood’. The motto is being taken seriously by all those merry men and maidens chasing shares in little-known or even bankrupt firms, using a mobile trading app called Robinhood.
What’s drawing punters to stock markets? Record savings, stimulus cheques, low interest rates and possibly just lockdown boredom. Their trading has spawned some eye-catching trades, including a 1000% one-day leap in Chinese property firm FANGDD — possibly because its name raised associations with the mighty U.S. tech sector.
Frenzied traders also piled into bankrupt names Hertz and JC Penney, pushing shares 300-500% higher. Some Chinese fintech companies were pumped up for no apparent reason — possibly they were climbing the charts on Robintrack, a site tracking activity on the Robinhood app.
Seasoned traders are scratching their heads. Big punts on small Chinese firms won’t impact broader markets but retail cash coursing through mainstream shares will further widen the disconnect between equity prices and the global economy.