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2021-03-18
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A Return to Wall Street’s Low-Rent District
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Critics are worried.\n\nPenny stocks are back\nOf all the trading manias in rece","content":"<blockquote>\n <b>Penny stocks are back. Critics are worried.</b>\n</blockquote>\n<p>Penny stocks are back</p>\n<p>Of all the trading manias in recent months — Bitcoin, SPACs, meme stocks, nonfungible tokens — the latest has a long history of fraud and scandal. That’s right,penny stocksare booming, according to The Times’s Matt Phillips, who visited the “low-rent district of Wall Street.”</p>\n<p><b>There were 1.9 trillion transactions last month on the over-the-counter markets,</b>where such stocks trade, according to the industry regulator Finra. That’s up more than 2,000 percent from a year earlier, driven in large part by the surge in retail trading — enabled by commission-free trading from online brokerages — that has also stoked the frenzy for shares in GameStop and other speculative assets.</p>\n<p><img src=\"https://static.tigerbbs.com/aa58f6e2e2054d5abe4bdd404453bc3a\" tg-width=\"1240\" tg-height=\"840\" referrerpolicy=\"no-referrer\"><b>Penny stocks have always lent themselves to quick fortunes,</b>given that small inflows to these low-priced, thinly traded shares can make prices go berserk. That also makes them prone to fraud like pump and dumps, updated for the modern age with schemes hatched on social media. “It’s all just a pool filled with sharks,” said Urska Velikonja, a law professor at Georgetown. “It’s where the unwary go to get eaten.”</p>\n<p><b>Penny-stock frenzies are common in raging bull markets.</b>The current fervor among retail traders presents unnerving echoes from the past, according to Tyler Gellasch of the nonprofit Healthy Markets Association. Based on the scale of the recent mania, “the only relevant historical precedent seems to increasingly be the days before the Great Depression,” he said.</p>\n<p><b>Take it from Jordan Belfort, of “The Wolf of Wall Street.”</b>“Everyone wants to get rich,” Mr. Belfort, a former “boiler-room” operator who pleaded guilty to market manipulation, told Matt, “and they want to get rich quick.” He added that an element of naïveté underpinned such trading: “We all want to believe in Santa Claus, the Tooth Fairy and Bernie Madoff.”</p>\n<p><b>HERE’S WHAT’S HAPPENING</b></p>\n<p><b>The Fed keeps its policies steady.</b>As expected, the central bankleft interest rates at rock-bottom levels, despite improving economic growth forecasts. But the Upshot’s Neil Irwin notes that it may become harder for Jay Powell, the Fed chair, towave away criticismof those who think monetary policy is too loose.</p>\n<p><b>The I.R.S. delays the tax filing deadline.</b>Americanshave until May 17 to filetheir federal income taxes, a delay meant to help people cope with the pandemic’s economic upheaval and account for changes from the rescue plan.</p>\n<p><b>Credit Suisse overhauls its business after the Greensill scandal.</b>The Swiss bank willseparate its asset-management division, replace its chief and suspend bonuses over the unit’s role in financing Greensill Capital, the supply-chain financing lender that collapsed this month.</p>\n<p><b>Gasoline may have hit its peak.</b>Global demandmay never return to pre-pandemic levels, the International Energy Agency said, as more electric vehicles hit the roads and transportation habits change. Use may rise for a bit in places like China and India, but overall consumption in industrialized economies will fall by 2023.</p>\n<p><b>Senate confirms President Biden’s top trade official.</b>Katherine Tai willbecome the U.S. trade representative. She is a prominent critic of China’s trade practices, signaling that the White House won’t completely walk back the Trump administration’s tough stance. Top U.S. officials are to meet their Chinese counterparts for the first time today,at a summit meeting in Alaska.</p>\n<p><b>Google is doubling down on office space</b></p>\n<p>Google said today that it planned toinvest $7 billion in offices and data centersin 19 U.S. states, making it the latest tech giantto expand its footprintwhile other companies retrench in a commercial real estate market roiled by the pandemic. Google’s C.E.O., Sundar Pichai, shared the plans in a blog post, saying that the move would create 10,000 jobs at the company this year. (Alphabet, Google’s parent company, employed around 135,000 people at the end of 2020.)</p>\n<p><b>Google is expanding across the country.</b>The plan includes investments in data centers in places like Nebraska, South Carolina and Texas. The company recently opened its first office in Minnesota and an operations center in Mississippi. It will open its first office in Houston this year.</p>\n<p><b>“Coming together in person to collaborate and build community is core to Google’s culture,”</b>Mr. Pichai wrote. Google was one of the first companies to tell employees to work from home, and it expects workers to begin returning to offices in September. When that happens, it will test a “flexible workweek,” with employees spending at least three days a week in the office.</p>\n<blockquote>\n <b>“Many have framed the GameStop mania as a David versus Goliath struggle. I believe it is more likely that, when we have full information about this episode, the story will more closely resemble Goliath vs. Goliath.”</b>\n <i>— Alexis Goldstein, a senior policy analyst for Americans for Financial Reform, at aCongressional hearingwhich focused on the relationship between brokers like Robinhood and market makers like Citadel Securities.</i>\n</blockquote>\n<p><b>Charting the blank-check boom</b></p>\n<p><b>SPACs have already raised more money this year than in all of 2020</b>, setting a record for blank-check deal volume. More than $84 billion has been raised by 264 SPACs to date, according to Dealogic, compared with $83 billion raised by 256 acquisition vehicles last year.</p>\n<p><img src=\"https://static.tigerbbs.com/ba3fa2a85adf8dd5c4b5da6857556353\" tg-width=\"1240\" tg-height=\"840\"></p>\n<p><b>SPACs sitting on some $135 billion are currently seeking takeover targets</b>, according to SPAC Research. Since they typically buy companies five times their size, that implies buying power of well over $600 billion, setting up a scramble for deals within the two-year window written into the rules of most SPACs.</p>\n<ul>\n <li>Lordstown Motors, an electric vehicle company that went public via SPAC last year, said yesterday that it wascooperating with an S.E.C. inquiry, after a short seller accused it of misleading investors about its business prospects.</li>\n</ul>\n<p><b>The S.E.C.’s crypto commissioner</b></p>\n<p>Hester Peirce is one of the few financial regulators with an online fan base and a nickname. Known to some as “Crypto Mom,” she’s been raising the profile of cryptocurrencies and blockchain technology since being appointed an S.E.C. commissioner in 2018. On “Blockchain Policy Matters,” an online show by the Blockchain Association, a trade group, Ms. Peirce described her hopes for innovation and regulation of the crypto world. DealBook got a preview of the show,which posts today.</p>\n<p><b>“Everyone is getting smarter on this stuff,”</b>Ms. Peirce said of regulators considering crypto issues. Engaging more with the private sector “can help us regulators sharpen our thinking,” she said, which could be “more nuanced.”</p>\n<p><b>“We’ve dug ourselves into a little bit of a hole,”</b>Ms. Pierce said of the S.E.C.’s refusal thus far to approve a Bitcoin exchange traded fund. “A lot of people are looking for a way to access the asset class.” In the past month, threebitcoin E.T.F.shave begun trading in Canada.</p>\n<p><b>She welcomes Gary Gensler, the blockchain professor, as the agency’s next chief.</b>President Biden’s pick to lead the S.E.C. has lectured on cryptocurrency and blockchain at M.I.T. since 2018. Ms. Peirce said she was “hopeful” that he will help the agency think “in a more sophisticated way.” She added that Mr. Gensler has “more inclination to regulate” than she does, but that she believes he’ can provide the regulatory clarity on crypto she has sought.</p>\n<p><b>Blockchain technology could address the issues raised by meme-stock mania.</b>That includes “concerns around settlement times, tracking where shares are, and who owns what shares when,” Ms. Pierce said. Distributed ledger technology like blockchain could eliminate common failure points in the financial system, rather than centralizing them, Ms. Peirce said, adding: “I hope that a lot of that innovation happens in the private sector as opposed to us taking it over as a securities regulator.”</p>","source":"lsy1605590967916","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>A Return to Wall Street’s Low-Rent District</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nA Return to Wall Street’s Low-Rent District\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-18 19:35 GMT+8 <a href=https://www.nytimes.com/2021/03/18/business/dealbook/penny-stocks-mania.html><strong>NewYork Times</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Penny stocks are back. Critics are worried.\n\nPenny stocks are back\nOf all the trading manias in recent months — Bitcoin, SPACs, meme stocks, nonfungible tokens — the latest has a long history of fraud...</p>\n\n<a href=\"https://www.nytimes.com/2021/03/18/business/dealbook/penny-stocks-mania.html\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.nytimes.com/2021/03/18/business/dealbook/penny-stocks-mania.html","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1169669203","content_text":"Penny stocks are back. Critics are worried.\n\nPenny stocks are back\nOf all the trading manias in recent months — Bitcoin, SPACs, meme stocks, nonfungible tokens — the latest has a long history of fraud and scandal. That’s right,penny stocksare booming, according to The Times’s Matt Phillips, who visited the “low-rent district of Wall Street.”\nThere were 1.9 trillion transactions last month on the over-the-counter markets,where such stocks trade, according to the industry regulator Finra. That’s up more than 2,000 percent from a year earlier, driven in large part by the surge in retail trading — enabled by commission-free trading from online brokerages — that has also stoked the frenzy for shares in GameStop and other speculative assets.\nPenny stocks have always lent themselves to quick fortunes,given that small inflows to these low-priced, thinly traded shares can make prices go berserk. That also makes them prone to fraud like pump and dumps, updated for the modern age with schemes hatched on social media. “It’s all just a pool filled with sharks,” said Urska Velikonja, a law professor at Georgetown. “It’s where the unwary go to get eaten.”\nPenny-stock frenzies are common in raging bull markets.The current fervor among retail traders presents unnerving echoes from the past, according to Tyler Gellasch of the nonprofit Healthy Markets Association. Based on the scale of the recent mania, “the only relevant historical precedent seems to increasingly be the days before the Great Depression,” he said.\nTake it from Jordan Belfort, of “The Wolf of Wall Street.”“Everyone wants to get rich,” Mr. Belfort, a former “boiler-room” operator who pleaded guilty to market manipulation, told Matt, “and they want to get rich quick.” He added that an element of naïveté underpinned such trading: “We all want to believe in Santa Claus, the Tooth Fairy and Bernie Madoff.”\nHERE’S WHAT’S HAPPENING\nThe Fed keeps its policies steady.As expected, the central bankleft interest rates at rock-bottom levels, despite improving economic growth forecasts. But the Upshot’s Neil Irwin notes that it may become harder for Jay Powell, the Fed chair, towave away criticismof those who think monetary policy is too loose.\nThe I.R.S. delays the tax filing deadline.Americanshave until May 17 to filetheir federal income taxes, a delay meant to help people cope with the pandemic’s economic upheaval and account for changes from the rescue plan.\nCredit Suisse overhauls its business after the Greensill scandal.The Swiss bank willseparate its asset-management division, replace its chief and suspend bonuses over the unit’s role in financing Greensill Capital, the supply-chain financing lender that collapsed this month.\nGasoline may have hit its peak.Global demandmay never return to pre-pandemic levels, the International Energy Agency said, as more electric vehicles hit the roads and transportation habits change. Use may rise for a bit in places like China and India, but overall consumption in industrialized economies will fall by 2023.\nSenate confirms President Biden’s top trade official.Katherine Tai willbecome the U.S. trade representative. She is a prominent critic of China’s trade practices, signaling that the White House won’t completely walk back the Trump administration’s tough stance. Top U.S. officials are to meet their Chinese counterparts for the first time today,at a summit meeting in Alaska.\nGoogle is doubling down on office space\nGoogle said today that it planned toinvest $7 billion in offices and data centersin 19 U.S. states, making it the latest tech giantto expand its footprintwhile other companies retrench in a commercial real estate market roiled by the pandemic. Google’s C.E.O., Sundar Pichai, shared the plans in a blog post, saying that the move would create 10,000 jobs at the company this year. (Alphabet, Google’s parent company, employed around 135,000 people at the end of 2020.)\nGoogle is expanding across the country.The plan includes investments in data centers in places like Nebraska, South Carolina and Texas. The company recently opened its first office in Minnesota and an operations center in Mississippi. It will open its first office in Houston this year.\n“Coming together in person to collaborate and build community is core to Google’s culture,”Mr. Pichai wrote. Google was one of the first companies to tell employees to work from home, and it expects workers to begin returning to offices in September. When that happens, it will test a “flexible workweek,” with employees spending at least three days a week in the office.\n\n“Many have framed the GameStop mania as a David versus Goliath struggle. I believe it is more likely that, when we have full information about this episode, the story will more closely resemble Goliath vs. Goliath.”\n— Alexis Goldstein, a senior policy analyst for Americans for Financial Reform, at aCongressional hearingwhich focused on the relationship between brokers like Robinhood and market makers like Citadel Securities.\n\nCharting the blank-check boom\nSPACs have already raised more money this year than in all of 2020, setting a record for blank-check deal volume. More than $84 billion has been raised by 264 SPACs to date, according to Dealogic, compared with $83 billion raised by 256 acquisition vehicles last year.\n\nSPACs sitting on some $135 billion are currently seeking takeover targets, according to SPAC Research. Since they typically buy companies five times their size, that implies buying power of well over $600 billion, setting up a scramble for deals within the two-year window written into the rules of most SPACs.\n\nLordstown Motors, an electric vehicle company that went public via SPAC last year, said yesterday that it wascooperating with an S.E.C. inquiry, after a short seller accused it of misleading investors about its business prospects.\n\nThe S.E.C.’s crypto commissioner\nHester Peirce is one of the few financial regulators with an online fan base and a nickname. Known to some as “Crypto Mom,” she’s been raising the profile of cryptocurrencies and blockchain technology since being appointed an S.E.C. commissioner in 2018. On “Blockchain Policy Matters,” an online show by the Blockchain Association, a trade group, Ms. Peirce described her hopes for innovation and regulation of the crypto world. DealBook got a preview of the show,which posts today.\n“Everyone is getting smarter on this stuff,”Ms. Peirce said of regulators considering crypto issues. Engaging more with the private sector “can help us regulators sharpen our thinking,” she said, which could be “more nuanced.”\n“We’ve dug ourselves into a little bit of a hole,”Ms. Pierce said of the S.E.C.’s refusal thus far to approve a Bitcoin exchange traded fund. “A lot of people are looking for a way to access the asset class.” In the past month, threebitcoin E.T.F.shave begun trading in Canada.\nShe welcomes Gary Gensler, the blockchain professor, as the agency’s next chief.President Biden’s pick to lead the S.E.C. has lectured on cryptocurrency and blockchain at M.I.T. since 2018. Ms. Peirce said she was “hopeful” that he will help the agency think “in a more sophisticated way.” She added that Mr. Gensler has “more inclination to regulate” than she does, but that she believes he’ can provide the regulatory clarity on crypto she has sought.\nBlockchain technology could address the issues raised by meme-stock mania.That includes “concerns around settlement times, tracking where shares are, and who owns what shares when,” Ms. Pierce said. Distributed ledger technology like blockchain could eliminate common failure points in the financial system, rather than centralizing them, Ms. Peirce said, adding: “I hope that a lot of that innovation happens in the private sector as opposed to us taking it over as a securities regulator.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":363,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":12,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/327189286"}
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