September 27, 2022

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It was a wild year

Shoppers wait for a GameStop store to open on at the Tysons Corner Center, in Tysons, Virginia, November 27, 2020.

Hannah McKay | Reuters

An army of Reddit traders, triple-digit gains and a $100 million deli: In a wild year of trading, the unexpected became the norm in the stock market.

This year’s activity coincided with a surge of rookie investors who joined the world of stock trading to ride the historic market rebound. Remote work, stimulus checks and higher personal savings levels, as well as social media chatrooms only accelerated the boom in retail trading.

“If there was ever a doubt about who wields power in the stock market, the U.S. retail investor stole the show in 2021,” Tony Pasquariello, global head of hedge fund coverage at Goldman Sachs, said in a note. “Following a year that saw more inflows than the prior 25 years combined, to what extent this cohort remains in the fight is a major open question for early 2022.”

Meme stocks shock Wall Street

Despite recent market sell-offs with GameStop and AMC each dipping to their lowest levels in months last week, both stocks are up this year, at about 716% and 1,260%, respectively. 

Performance varies for other stocks popular on Reddit message boards. BlackBerry is up 40% for the year, while Tesla added 48%. Clover Health and Bed Bath & Beyond are down roughly 75% and 13%, respectively.

A $100 million deli

SPAC explosion

It was also the year of SPACs.

The funds raised via U.S. special purpose acquisition companies have totaled a record of $162 billion in 2021, almost doubling the $83.4 billion issuance last year, according to data from SPAC Research.

SPACs raise capital in an initial public offering and use the cash to merge with a private company and take it public, usually within two years.

https://www.cnbc.com/2021/12/23/meme-stocks-spac-craze-and-100-million-deli-2021-marks-a-wild-year-in-the-stock-market.html