Thursday, January 28, 2021
Share has the same ticker symbol
Nickel producer surfs the gamestop wave
All because some funds had bet on the downfall of a video game retailer: For days, private investors have been driving Gamestop shares to unimaginable heights, forcing one of the hedge funds almost to its knees and causing some confusion for the head of an Australian nickel producer.
Because many small investors were apparently not looking closely, the share price of the almost unknown nickel producer GME Resources went through the roof. Because the papers of the Australian company have largely the same letter combination on the stock exchange as the US video game retailer Gamestop, whose share price has multiplied in the past few days. Both have the ticker symbol "GME".
The Australians are listed on the Sydney Stock Exchange, while Gamestop is on Wall Street. At Reuters, for example, this difference is marked with the addition ".AX" or ".N" in the abbreviation. "There are people who buy the stock just for fun, just because of the ticker symbol," said market analyst Kyle Rodda of the Melbourne brokerage firm IG Markets. "It's all due to this gamestop dynamic. It has nothing to do with the company."
The shares of the GME from Australia rose recently by up to 53 percent. This also astonished its managing director Peter Sullivan. "I thought, what's going on here? Is there something in my own company that I don't know?" But then someone told him that it had something to do with the ticker code. "And I was hoping to say it was because of our world-class nickel projects."
Small investors have joined Gamestop en masse since mid-January and have thus ensured that its market value has increased 17 times. They try to play off professional investors who had bet on falling prices. This brought the hedge fund Melvin Capital to the brink of bankruptcy, and it had to be saved with a cash injection. In this week alone, this has driven the game stop rate from 75 to at times 380 dollars.
A similar exchange rate driving mix-up as in the case of the nickel producer GME Resources had already occurred around two weeks ago. At that time, the prominent boss of the Tesla electrical engineering company, Elon Musk, wrote in a tweet: "Use signal." He was referring to a competitor of the messenger service Whatsapp belonging to the Facebook group. But many investors pounced on the stock of a medical technology company called Signal Advance. Its price then rose by around 10,000 percent within a short time, although the company has nothing to do with the Signal messenger service. This is developed and supported by a foundation.
.