Jon Stewart Finally Joins Twitter - to Talk About GameStop and Wall Street

Stewart defended the army of small investors behind this week's dramatic squeeze on Wall Street hedge funds

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In this Tuesday, Nov. 10, 2015, file photo, comedian Jon Stewart performs at the 9th Annual Stand Up For Heroes event, in New York.  HBO is scrapping a web-delivered satirical project it was developing with Stewart
In this Tuesday, Nov. 10, 2015, file photo, comedian Jon Stewart performs at the 9th Annual Stand Up For Heroes event, in New York. HBO is scrapping a web-delivered satirical project it was developinCredit: Photo by Greg Allen/Invision/AP, File

Jon Stewart, the popular Jewish comedian, finally joined Twitter on Thursday and used his first tweet ever to defend the users on Reddit who sent the stock price of GameStop through the roof this week.

“This is bullshit. The Redditors aren't cheating, they're joining a party Wall Street insiders have been enjoying for years. Don't shut them down...maybe sue them for copyright infringement instead!!,” Stewart wrote. “We’ve learned nothing from 2008. Love StewBeef”

The army of small investors behind this week's dramatic squeeze on Wall Street hedge funds returned to drive shares in GameStop and other hot companies higher on Friday as online broker Robinhood eased disputed trading restrictions.

Shares in the video game store chain and headphone maker Koss Corp both doubled in early deals after slumping on Thursday when several online platforms imposed buying halts, sparking a backlash from investors, celebrities and policymakers.

Robinhood said on its website that it was easing the restrictions, but still not allowing purchases of fractional shares in GameStop and 12 other companies, effectively meaning smaller investors have to bet more in order to buy in further to the trade.

The website also showed the brokerage, which has said its hand has been forced by the surge in market volatility, was maintaining numerical limits on the number of shares any one account could hold in each of the companies, further hampering players with existing positions from betting on more gains.

The showdown between small-time traders and professional short-sellers has drawn the scrutiny of Congressional lawmakers, the White House, the Securities and Exchange Commission (SEC) and is being probed by the New York Attorney General.

Global equity markets have also suffered as funds were forced to sell some of their best-performing stocks, including Apple Inc, to cover billions of dollars of losses

S&P 500 futures fell another 1% early on Friday.

"My expectation is that this will blow over and then the Robinhood crowd will look for a different target, but typically these things come in waves," said Andrea Cicione, head of strategy at TS Lombard in London.

REDDIT ANGER

On Reddit forum WallStreetBets, which with almost 6 million members is seen as having fuelled the rallies, GameStop and AMC remained overwhelmingly favored stocks.

J.P. Morgan has named 45 stocks that may be susceptible to similar "fragility events" in days to come, including real estate company Macerich Co, restaurant chain Cheesecake Factory Inc and clothing subscription service Stitch Fix Inc.

Like GameStop, AMC and American Airlines Group Inc, all have high "short" interest ratios, making them subject to a squeeze on funds that have bet on the shares falling.

The chief executive of the London Stock Exchange, David Schwimmer, said regulators needed to be mindful of when the line was crossed into market manipulation.

"We've seen disruption by new technology and social media in a number of other industries so in some ways it's not surprising to see it in financial markets," he said.

"I will let the regulators determine whether there's a need to take a careful look at this if it moves into the realm of market manipulation ," Schwimmer added.

Online broker Robinhood has been one of the hottest venues in the retail-trading frenzy but its sudden curbs on buying set off a raft of online protests as the firm tapped credit lines to ensure it could continue trading.

The brokerage also said it had raised more than $1 billion from its existing investors, having been strained by the high volumes and volatility of trading this week.

A website on the short squeeze strategy set up by one WallStreetBets participant, http://isthesqueezesquoze.com/, told traders with Robinhood accounts to "find a new broker asap", listing rivals Vanguard, Ameritrade and Fidelity, who have yet to place limits on trades.

Regarded by market professionals as "dumb money", the pack of retail traders - some of them former bankers working for themselves - has become an increasingly powerful force in the financial world, sparking calls for greater scrutiny into trading on easy access online apps fueled by anonymous discussions on social media.

"Now we're really figuring out what can happen when something doesn't go their way," said JJ Buckner, a 29-year old Robinhood trader whose YouTube live-stream got over 250,000 hits earlier this week.

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