Today, the hottest name among meme stock investors may not be AMC Entertainment Holdings, Inc. or GameStop Corp., but an obscure Australian stock transfer company.
Investors in meme stocks have been moving their shares to Computershare in massive numbers since summer. The Australian company allows investors to hold shares directly, rather than through a broker.
A Seismic Shift
As investors began to hold their shares directly for the long term, volumes in AMC and GameStop have plummeted:
AMC traded nearly 800 million shares a day in early June and is down to under 50 million now. GameStop was trading over 20 million a day in June, but now fewer than a million shares trade hands in a typical day.
Many investors are concerned that their shares are being loaned out to hedge funds to sell short. This can drive down the price of the stock.
Brokerages insist they only lend out shares that were bought on margin. But many investors are skeptical.
Even if brokerages are telling the truth, there’s another compelling reason to use Computershare: Robinhood’s January trading curbs.
In January, Robinhood made it impossible to buy shares of GameStop, AMC, and other meme stocks. This cratered demand for the shares and they fell substantially.
Whether you want to go to the extra trouble to hold shares directly will depend on the person. But direct ownership is a valuable tool in the investor’s kit, and I’m glad it’s becoming better known!
Do you own shares directly or via a broker, and why? Let me know in the comments below.
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