TOKYO (Reuters) - An iconic cafe and show venue that symbolises Japan’s “kawaii” pop culture, and is beloved by tourists and celebrities, has shut its doors in Tokyo, the capital, after business dried up following the COVID-19 pandemic.
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A funky aesthetic of outlandish colours and designs made Kawaii Monster Cafe in the capital’s youth culture hotspot of Harajuku a hit, drawing overseas A-listers, such as reality star Kim Kardashian, singer Dua Lipa and Jenny of K-pop’s Blackpink.
But its five-year run ended on Sunday, in part after overseas clientele disappeared because of border curbs against the pandemic.
“I’m glad that I could come on the final day. I’m really moved,” said Misuzu Kida, 24.
Kida was among the fans who flocked for a last chance to see their favourite cosplay-inspired “Monster Girls” staff and soak up the atmosphere in quirkily-themed areas such as the Mushroom Disco and Mel-Tea Room.
The cafe had hoped to capitalise on strong demand during the 2020 Olympics, but with the outlook still uncertain after the virus forced a year’s delay in the Tokyo games, a decision was made to let the lease expire and shut down.
“I feel it is very hard to keep the business going, without knowing how long the current situation will last,” cafe manager Keisuke Yamada told Reuters.
“It is difficult for overseas customers to come to Japan, and it is also difficult for customers in Japan to go out.”
The cafe had kept shorter hours, shutting by 7 p.m., since a temporary closure last spring for about 2-1/2 months after Japan declared a state of emergency over the virus.
Japan, with a tally of 390,687 infections and 5,766 deaths, is expected to extend an emergency for Tokyo and other areas this week as hospitals face pressure despite a drop in cases from their peaks, media have said.
While Sebastian Masuda, the artist who designed the sprawling cafe, said he was sad to see it close, he remained upbeat on the future of the trend-setting district.
“In Harajuku, regardless of age and era, the younger generations will always create new cultures. So I believe that the young generation will make something interesting again.”
Reporting by Chris Gallagher and Irene Wang; Editing by Clarence Fernandez
DETROIT – The number of confirmed cases of the coronavirus (COVID-19) in Michigan has risen to 559,241 as of Saturday, including 14,601 deaths, state officials report.
Saturday’s update includes 1,358 new cases and 104 additional deaths, including 93 deaths identified during a review of records -- meaning they did not occur between Friday and Saturday. On Friday, the state reported a total of 557,883 cases and 14,497 deaths.
On Saturday, the state reported a total of 481,801 recoveries from the virus.
Michigan officials no longer provide statewide coronavirus updates on Sundays; the next update is expected Monday afternoon.
New COVID-19 cases have plateaued and deaths are starting to slow. Testing has been steady with more than 40,000 diagnostic tests reported per day on average, with the 7-day positive rate average around 6%. Hospitalizations continue to decline over the last several weeks.
Michigan’s 7-day moving average for daily cases was 1,596 on Saturday -- the lowest since October. The 7-day death average was 66 on Saturday. The state’s fatality rate is 2.6%. The state also reports “active cases,” which were listed at 62,800 on Saturday -- the lowest it’s been since November.
According to Johns Hopkins University, more than 25.8 million cases have been reported in the U.S., with more than 434,600 deaths reported from the virus as of Jan. 30.
Worldwide, more than 101.8 million people have been confirmed infected and more than 2.1 million have died as of Jan. 30. More than 55 million have recovered, according to Johns Hopkins University. The true numbers are certainly much higher, because of limited testing, different ways nations count the dead and deliberate under-reporting by some governments.
One cause of concern is the new variant of the virus. Officials have confirmed 17 cases of that variant, as of Monday. Khaldun is worried about how the spread of the variant will affect the case, positivity and hospitalization rates.
Gov. Gretchen Whitmer announced the order will allow indoor dining at restaurants, concessions at entertainment venues such as casinos, movie theaters and stadiums, personal services requiring mask removal and non-residential gatherings of up to 10 people from two households.
“The pause has worked,” Whitmer said. “The efforts we have made together to protect our families, frontline workers and hospitals have dramatically reduced cases and we have saved lives. Now, we are confident that starting Feb. 1, restaurants can resume indoor dining with safety measures in place.”
“We are pleased to see the improvements in case rates, hospitalizations and percent positivity that have allowed us to reopen more activities,” said Dr. Joneigh Khaldun, chief medical executive and chief deputy for health at MDHHS. “However, we must remain vigilant, especially since we now have a new more easily transmitted variant of this virus present in our state.”
Michigan’s risk for a coronavirus outbreak has recently decreased -- but has not altogether vanished -- nearly one month into the new year, according to data from Covid Act Now.
A screenshot of Covid Act Now's map of the U.S. with states color-coded according to their "Covid Risk Level." Michigan is labeled as "at risk" of a COVID outbreak, while most other states are considered to be experiencing an "active or imminent outbreak," according to data. Photo courtesy of Covid Act Now's website. -- Jan. 21, 2020(Covid Act Now)
At the beginning of 2021, Michigan -- like much of the country -- was considered to be experiencing an “active or imminent outbreak,” which is a “critical” risk level. As of Thursday, Jan. 21, the state’s risk level has decreased due to fewer new COVID-19 cases reported each day, as the remainder of the country continues to struggle with virus spread.
Michigan is one of only five states labeled as high risk for an outbreak, which is the orange color on Covid Act Now’s national map. Three states -- California, Arizona and South Carolina -- are colored maroon, meaning they are experiencing a “severe” coronavirus outbreak. All remaining states, except Hawaii, are colored crimson on the map, which is considered the critical risk level. Hawaii is labeled as experiencing “slow disease growth.”
Michigan has released a preliminary timeline to show a projection of when other phases can expect to begin receiving the COVID-19 vaccine.
Michigan recently moved into the 1B phase, which includes essential workers like teachers and opens up appointments for residents over the age of 65. Some counties have started vaccinating at this level, while some are still waiting to increase vaccine supply.
The preliminary timeline is fluid. It states very clearly, “Dates are estimated and expected to change based on vaccine availability.” And vaccine availability is limited right now -- but it should be improving in the near future.
Michigan is moving on to a new phase of COVID-19 vaccinations, including teachers, first responders, childcare providers and residents 65 years of age and older.
“We are pleased to move the state forward in the next stage of vaccinations,” said Dr. Joneigh Khaldun, chief medical executive for MDHHS. “These vaccines are safe and effective, and we especially want our first responders, teachers and older adults to get vaccinated as soon as possible. The strategy we are announcing today is efficient, effective, and equitable, focusing on making vaccine available to those who have the highest level of risk, whether it is because of where they work or because of their age.”
Gov. Gretchen Whitmer is “strongly encouraging” Michigan public schools to reopen for in-person learning by the beginning of March.
Public schools in Michigan were shut down during the fall due to a surge in COVID-19 cases. Their buildings have been closed for about two months -- since the state reported thousands of COVID-19 cases per day in November.
“The value of in-person learning for our kids is immeasurable, and we must do everything we can to help them get a great education safely,” Whitmer said. “Over the last 10 months, medical experts and epidemiologists have closely followed the data and have learned that schools can establish a low risk of transmission by ensuring that everyone wears a mask and adopting careful infection prevention protocols.
I strongly encourage districts to provide as much face-to-face learning as possible, and my administration will work closely with them to get it done.”
Michigan COVID-19 daily reported cases since Jan. 1:
Jan. 1 -- 2,994 new cases
Jan. 2 -- 2,995 new cases
Jan. 3 -- 2,496 new cases
Jan. 4 -- 2,496 new cases
Jan. 5 -- 2,291 new cases
Jan. 6 -- 4,326 new cases
Jan. 7 -- 4,015 new cases
Jan. 8 -- 3,625 new cases
Jan. 9 -- 2,706 new cases
Jan. 10 -- 2,268 new cases
Jan. 11 -- 2,268 new cases
Jan. 12 -- 1,994 new cases
Jan. 13 -- 2,694 new cases
Jan. 14 -- 2,698 new cases
Jan. 15 -- 2,598 new cases
Jan. 16 -- 1,932 new cases
Jan. 17 -- 1,421 new cases
Jan. 18 -- 1,422 new cases
Jan. 19 -- 1,738 new cases
Jan. 20 -- 2,031 new cases
Jan. 21 -- 2,165 new cases
Jan. 22 -- 2,157 new cases
Jan. 23 -- 1,601 new cases
Jan. 25 -- 3,011 new cases (case count for two days)
Jan. 26 -- 1,476 new cases
Jan. 27 -- 1,681 new cases
Jan. 28 -- 1,872 new cases
Jan. 29 -- 1,774 new cases
Michigan COVID-19 daily reported deaths since Jan. 1:
Jan. 1 -- 88 new deaths
Jan. 2 -- 89 new deaths
Jan. 3 -- 40 new deaths
Jan. 4 -- 40 new deaths
Jan. 5 -- 189 new deaths (117 from vital records)
Jan. 6 -- 51 new deaths
Jan. 7 -- 176 new deaths (138 from vital records)
Jan. 8 -- 38 new deaths
Jan. 9 -- 222 new deaths (207 from vital records)
Jan. 10 -- 23 new deaths
Jan. 11 -- 24 new deaths
Jan. 12 -- 100 new deaths
Jan. 13 -- 32 new deaths
Jan. 14 -- 139 new deaths (107 from vital records)
Jan. 15 -- 29 new deaths
Jan. 16 -- 103 (90 from vital records)
Jan. 17 -- 10 new deaths
Jan. 18 -- 10 new deaths
Jan. 19 -- 41 new deaths
Jan. 20 -- 40 new deaths
Jan. 21 -- 148 new deaths (128 from vital records)
Jan. 22 -- 17 new deaths
Jan. 23 -- 221 new deaths (205 from vital records)
Jan. 25 -- 35 new deaths (count for two days)
Jan. 26 -- 79 new deaths
Jan. 27 -- 6 new deaths
Jan. 28 -- 80 new deaths (67 from vital records)
Jan. 29 -- 6 new deaths
Coronavirus resources:
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When Pennsylvania partially abolished slavery in 1780, it established the Pittsburgh region — between the Southern slave states and Northern free states — as a destination for Black Americans looking for liberty.
“It set Western Pennsylvania up as the crossroads between slavery and freedom,” said Samuel Black, director of African-American programs at the Senator John Heinz History Center in Pittsburgh.
From the founding of the country to the modern era, the region’s Black residents have helped shape the history of the United States.
Slavery and abolition
Though it is remembered as a free state, Pennsylvania was no stranger to slavery. While not reliant on slave labor like the plantation economies of the South, slave ownership was a sign of status among the rich and prominent.
The state’s Gradual Abolition Act of 1780 prohibited the importation of enslaved people. However, anyone who was already enslaved would remain so, and children of slaves would remain enslaved until they turned 28.
Westmoreland County’s two representatives to the state assembly voted against the act.
In 1790, there were 128 slaves in Westmoreland County, which had a total population of just over 16,000, according to historical records.
“A lot of people kind of get shocked when they find out how many slaves were in Pennsylvania,” said Anita Zanke, library coordinator for the Westmoreland County Historical Society. “They show up in the Hempfield Township tax records. You got taxed on your horses, your cows and your slaves.”
Enslaved people used to be sold at an auction block in front of the county courthouse in Greensburg. The county’s last known slave auction was held in 1817.
Southwestern Pennsylvania clung to slavery longer than counties in the east, according to historians. In some ways, the frontier counties in the Southwest had more in common with Virginia, where slavery was rampant, than they did with Philadelphia, where the abolition movement was thriving.
“Slavery took root in the western counties, and lingered there longer than anywhere else,” historian Edward Turner wrote in his 1911 book “The Negro in Pennsylvania.”
Fight for freedom
Despite slavery’s roots in the region, numerous abolitionist groups cropped up in and around Pittsburgh. Black leaders in Pittsburgh at the time included Martin Delany, a doctor, activist and newspaper publisher who went on to became a major in the Civil War, the first Black field grade officer in the Army.
Because of its proximity to Virginia, Southwestern Pennsylvania was an important destination for escaped slaves seeking freedom in the North along the Underground Railroad.
It sometimes seems as though every old house in the region is rumored to be a former Underground Railroad stop, according to Zanke. These rumors usually are impossible to prove.
“It’s very hard to document because they kept it a secret,” Zanke said.
However, there is evidence the Underground Railroad stopped in several local communities, including Mt. Pleasant, Ligonier and Hanna’s Town.
When the Fugitive Slave act of 1850 made it legal to pursue escaped slaves into free states, Black residents started creating their own militias to defend themselves. There were two such militias in the Pittsburgh area, according to Samuel Black — the Fort Pitt Cadets and the Hannibal Guards.
These militias were among the first to volunteer for the Union Army when the Civil War started in 1861, but they were not allowed to join because of their race, Black said.
It wasn’t until 1863, with the formation of the United States Colored Troops, that Black men were allowed to fight. Records show about 151 Allegheny County residents and 32 from Westmoreland joined the U.S. Colored Troops.
“Unlike World War I or World War II, where African Americans were largely restricted from combat, they were mostly in support services. In the Civil War, the U.S. Colored Troops were trained for combat,” Black said.
Leaders and legends
In the decades after the war, when Black Americans were free but segregation widespread, Black residents of Southwestern Pennsylvania created their own social groups and political organizations. They started businesses, and some rose to prominence, like Cumberland Posey, who in the early 1900s built barges, started his own coal company and became the first president of the Pittsburgh Courier newspaper.
His fame would eventually be eclipsed by his son.
Cumberland Posey Jr. was a sports legend. A star basketball player at Homestead High, Penn State and Duquesne University, Posey in the early 1910s founded and played for the Loendi Big Five basketball team. It went on to win The Colored Basketball World Championship five times.
He’s even better known for his career in baseball as a player, manager and eventual owner for the Homestead Grays of the Negro National League. Under his leadership, the team won nine straight championships between 1937 and ‘45.
Posey is in the National Baseball Hall of Fame and the Basketball Hall of Fame.
While the Grays were dominating baseball diamonds, some Black Pennsylvanians were taking to the sky.
George Allen was born in Tyrone, Blair County, in 1910. Inspired by the exploits of Charles Lindbergh and other daring pilots of the era, he dreamed of flight, eventually moving to New Alexandria so he could take flying classes at Latrobe Airport.
He scraped up enough money to buy a plane and became a pilot and flight instructor.
When World War II broke out, Allen’s poor eyesight kept him from becoming a fighter pilot, but his years of experience made him a perfect teacher. He became the chief instructor at the Tuskegee Army Air Fields in Alabama, teaching the mostly Black fighter pilots who would become known as the Tuskegee Airmen.
After the war he returned to his job at as a flight instructor in Latrobe, even giving lessons to Fred Rogers of “Mister Rogers’ Neighborhood.”
Not long after Posey Jr. made sports history, New Kensington’s Willie Thrower did so. He was a star quarterback for New Kensington High School from 1945 to ‘48, losing only a single game.
When Michigan State University recruited Thrower, he became the first Black quarterback on a Big Ten team. In 1953, he signed with the Chicago Bears.
As a backup quarterback, he played only once. That single drive, in 1953, was enough to make him the first Black quarterback to play in the modern NFL. He drove the ball 45 yards against the San Francisco 49ers before he was benched in favor of starting quarterback George Blanda, a Youngwood native, who scored a touchdown.
Thrower was dropped after one season. He eventually moved back to New Kensington, where he started two taverns. It would be 15 years before Marlin Brisco joined the Denver Broncos to become the second Black professional quarterback.
Civil rights in the Steel City
The civil rights movement in Southwestern Pennsylvania looked much the same as it did in other parts of the country — but with a special focus on economics and property rights, according to Black of the Heinz History Center.
The Black Construction Coalition in the late 1960s protested at construction sites that would not hire Black workers. That included Three Rivers Stadium, the former home of the Pittsburgh Pirates and Steelers.
“There’s a long history of unions discriminating against qualified African Americans,” Black said.
Pittsburgh is well-known for being at the center of the American labor movement, but the rights won by white workers were not always extended to their Black counterparts, he said.
“If you look deeper, you would say, ‘hey, this is no different than a lot of other things in the American society, especially in the 20th century, where discrimination is existing,’ ” he said.
The history of Southwestern Pennsylvania is inseparable from the history of its Black residents, Black added.
“African Americans were a vital part of the development of Pittsburgh and Western Pennsylvania from the very beginning,” he said. “African Americans were here during the French and Indian War. They settled in Pittsburgh, operated businesses in the 18th and early 19th centuries … served in every war, were slaves, fought for freedom.”
Jacob Tierney is a Tribune-Review staff writer. You can contact Jacob at 724-836-6646, jtierney@triblive.com or via Twitter .
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GameStop's and AMC's stocks have been on an epic rollercoaster ride. Here's what's going on.
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For years, Wall Street investors bet that video game retailer GameStop would fail. The move toward online game buying would eventually spell doom, they said. The pandemic appeared to speed up those changes, too. Wall Street was so sure GameStop would fail that they made it one of the most heavily bet-against stocks on the market. Over the past few months though, a bunch of Reddit users have been buying up shares, pushing up GameStop's value and undermining Wall Street's big bets. At first, these forum traders bought because they believed the company was better off than the Wall Street doubters thought. Then, as GameStop value soared, Wall Street's bad bets started to cost investors billions of dollars.
Now the Reddit users want the price to rise even more, as they wage an epic battle against Wall Street.
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At one point, the Reddit users from the forum r/WallStreetBets sent the stock up more than 14,300% (you read that right), though it's gone through wild fluctuations. They've spread their strategy to struggling movie chain AMC, and tech company BlackBerry, too. In their wake, these online market players have upended Wall Street, creating a drama filled with memes, app trading disasters and weird internet lingo as big-time investors have lost billions of dollars.
It's a crazy story, complete with cameos by Tesla CEO Elon Musk and CNBC financial commentator and former hedge fund manager Jim Cramer. There's even Michael Burry, one of the subjects of the book and movie The Big Short, who happens to be a prominent investor in GameStop.
Even Silicon Valley found a way to get in the middle of this mess. It's wild.
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"We're seeing a phenomenon that I have never seen," Jim Cramer, a Wall Street commentator on CNBC and a former hedge fund manager, said during a segment as GameStock's stock began rocketing up. And GameStop could be just the start. "It's insane."
It all started last week, when posters on the Reddit stock trading chat community r/WallStreetBets pushed up shares in the struggling game retailer. With much of Wall Street betting against GameStop's success, r/WallStreetBets investors believed they could force a market rally by creating demand where there had been little before.
As a result, GameStop stock jumped more than 822%, from $17.25 per share at the beginning of the year to a high of $159.18 on Jan. 25. The next day, it dropped by nearly half, only to rise back up. And then Elon Musk tweeted about it to his 43 million followers (using that weird internet vocabulary, of course), and the price jumped 40%.
Later that week, the stock jumped even higher, to $483 per share, before halving again. Amid all the chaos, the stock market temporarily halted GameStop share trading more than a dozen times some days because share price moves were wildly swinging by large amounts.
It's not just GameStop either. Reddit traders set their eyes on BlackBerry too, attempting to pull the same trick against Wall Street's negative bets. So far, they've pushed shares up more than double from $6.58 per share, where they started at the beginning of the year, though its price has swung up and down as well..
There's also AMC Theaters, which saw its business crater as movie releases were pushed back and people stayed at home. But Reddit users think Wall Street's being overly pessimistic about that one too, leading them to spawn the hashtag #SaveAMC on Twitter. Its stock jumped from $2.01 per share at the beginning of the year to $19.90 on Jan. 27, before halving the next day.
Some trading companies such as Robinhood, TD Ameritrade and WeBull responded to the fluctuations by restricting trades of GameStop, AMC and other fast-moving stocks during the chaos.
Robinhood drew particular ire, leading US Reps. Rashida Tlaib and Alexandria Ocasio-Cortez, as well as Sen. Ted Cruz, to criticize its decision. Some people had already raised concerns about Robinhood before, saying it "gamified" stock trading. Now it's being accused of outright market manipulation, including through at least one class action lawsuit filed already. Robinhood, for its part, said market rules effectively forced it to put those restrictions in place.
It's a lot to take in. So, here's what you really need to know about GameStop, AMC and Wall Street.
How'd this happen?
GameStop is one of the largest video game retailers in the world, but it's struggled to remain relevant in the age of online sales.
Effectively, the r/WallStreetBets crowd realized Wall Street made a huge mistake. People known as short sellers who were betting GameStop stock would fall had been too aggressive.
The r/WallStreetBets crowd understood that if they could create artificial demand for GameStop shares with their own money, they could force Wall Street to recalibrate its bets, pushing prices even higher. And some investors who couldn't even back up their bets against GameStop, would have to pay even more.
As of Jan. 27, there were 3.8 million members of the r/WallStreetBets community, though it's nearly impossible to determine how many people are involved in the GameStop, AMC and BlackBerry schemes.
What we do know is that all this activity appears to have created a "short squeeze," where the short sellers betting against GameStop are being forced to buy more GameStop stock to cover their losses. That pushed the price up even more, which forces more short sellers to cover their losses, which pushes the price up even more. Some of the Reddit crowd believe that GameStop stock could reach into the thousands of dollars just because of this mechanism.
And that's why we're suddenly seeing GameStop's value jump.
When people buy a stock normally, they're betting it'll rise or share enough profits that they'll make more money than they put in.
Short sellers, or "shorts," do the opposite. Shorts trade with borrowed shares and sell them, with hopes they can make money if the stock falls in the future.
Imagine Ian Corp. is a public company, and its shares are worth $10. A "short" would borrow shares of Ian Corp. and sell them for $10. Their bet is that Ian Corp. stock will actually drop below that -- maybe to $4. If it does, then, they can buy the shares at $4 and pocket the other $6.
If Ian Corp. stock jumps to $25, then the lender who made this bet possible may push the short to cover their bet. That would mean the short effectively has to buy the shares at the new, higher price.
When a short is right, betting against a company, they can make a lot of money. But if they're wrong, they can lose a lot more money too.
There are other options and tools to bet against a company's future as well.
GameStop stock from Jan. 19 to Jan. 25.
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How much money did the GameStop shorts lose?
The losses appear to be tremendous. As of Jan. 27, shorts seemed to have lost $5 billion betting against GameStop this year, according to Investopedia. About $1.6 billion, or about half, of those losses happened on Friday, Jan. 29 when the stock jumped 51%.
It's also worth noting that GameStop began the year as one of the most shorted companies on the market.
That seems like a lot of money
It is, but what's perhaps an even bigger indication of how dramatic these moves were, stock markets temporarily halted share trading for AMC, GameStop and other fast moving shares dozens of times since the drama began.
These wild swings won't continue forever, will they?
Part of what's driven this behavior is the popularity of retail investing, or when traders who aren't Wall Street professionals buy and sell stocks. Stock trading apps, often with no fees, have made it easy for people to jump into the market. And social media has helped people to rally together, egging one another on to buy more and more of a stock.
"GameStop's rally is one in a series of eye-catching market moves to stir concerns among fund managers, some of whom say trading by individual investors is pushing stock prices out of whack with fundamentals," The Wall Street Journal wrote when the drama began.
How's Wall Street responding?
Many Reddit users accuse Wall Street investors of manipulating the market against them.
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Big name trading apps like Robinhood, ETrade and others have reportedly struggled to remain online amid all the hysteria. TD Ameritrade on Jan. 27 acted to restrict the sudden spikes in demand, "out of an abundance of caution amid unprecedented market conditions."
Robinhood has also come under particular scrutiny for appearing to severely restrict trades of some stocks while the market was wildly fluctuating that week. Politicians on both sides of the aisle in the US have called for an investigation into the app maker. Meanwhile, many angry Redditors say they'll stop using Robinhood. Some have even threatened to join a class action lawsuit.
Nasdaq said it will halt trading on a stock if it finds a link to unusual activity on social media. The company said it sees its role as a "self-regulatory organization" is to make sure its markets act in a "legitimate" way. "Regulators kind of have to catch up with the technology that's now available," Nasdaq CEO Adena Friedman told CNBC on on Jan. 27.
Throughout the past week, the markets have temporarily halted trades of GameStop and AMC stocks in particular because of the wide price swings and heavy volume.
I heard people are particularly angry at Robinhood. Why?
Of the stock trading apps, Robinhood appeared to be the most aggressive in shutting down purchases of highly volatile stocks like GameStop and AMC. The company hasn't given clear reasons, other than vaguely saying it's working in the interest of users. But the US government may not agree.
On Jan. 29, the Securities and Exchange Commission said it's "closely monitoring and evaluating the extreme price volatility of certain stocks' trading prices over the past several days."
The statement didn't mention Robinhood by name, but the commission said it would "closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities."
Robinhood declined to comment about the SEC statement. The White House referred questions about GameStop and brokerage firms to the Treasury Department, which houses the SEC.
What does Robinhood have to say?
On Jan. 29, the company published a blog post explaining that the company it works with to help users trade stocks was what had set off all the drama. That company, a clearinghouse that helps facilitate the transaction of stocks and cash between buyers and sellers, requires Robinhood and other trading companies it works with to have a specific amount of money in deposits each day to cover their customer's stock trades. That amount changes each day, based in part on market volatility.
Robinhood said the increased share trading led its clearinghouse to demand Robinhood increase its deposits tenfold. "That's what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on," the company said. The requirements were so large, it said, that it had to restrict trades in order to meet its requirements.
"It was not because we wanted to stop people from buying these stocks," the company added. "This is a dynamic, volatile market, and we have and may continue to take action to make sure we meet our requirements as a broker so we can continue to serve our customers for the long term."
Has Robinhood gotten in trouble with the SEC before?
It has. A little over a month ago, on Dec. 17, the SEC charged Robinhood with "repeated misstatements that failed to disclose the firm's receipt of payments from trading firms for routing customer order to them." What that means in plain English is that Robinhood didn't tell users that their share trades might be accessible by people competing against them in the market.
Robinhood made its name by offering stock trades without a standard commission that people often payed at other firms. The SEC said that between 2015 and 2018, Robinhood made misleading statements and omissions, including "in FAQ pages on its website, about its largest revenue source when describing how it made money – namely, payments from trading firms in exchange for Robinhood sending its customer orders to those firms for execution, also known as 'payment for order flow.'"
The SEC estimated that Robinhood's approach deprived users of $34.1 million, even after taking into account the savings from not paying a commission.
Robinhood agreed to pay $65 million to settle the charges "without admitting or denying" the SEC's findings.
"There are many new companies seeking to harness the power of technology to provide alternative ways for people to invest their money," Erin E. Schneider, director of the SEC's San Francisco regional office, said at the time. "But innovation does not negate responsibility under the federal securities laws."
What do the companies think of all this?
GameStop didn't respond to a request for comment. BlackBerry executives told MarketWatch it was "not aware" of any reason for the recent trading activity. BlackBerry did reach a settlement with Facebook earlier this month over a patent fight, though the terms were not disclosed.
Why are the Redditors doing this?
There's the seeming easy money aspect, which is compelling in and of itself if you're that comfortable with risk. But some of them are also framing this as a crusade against Wall Street. "We're in a war," one Redditor posted. "A war for the redistribution of wealth."
You promised me Elon Musk, how's he involved?
Aside from being a prolific Twitter user, Musk has also recently learned he can drive people to various companies' stocks. He tweeted about how much he enjoyed buying something for his dog off Etsy, and the stock jumped. Now he's tweeted about GameStop, stirring up more frenzy.
Any other people's opinions I should know about?
If you're a fan of Comedy Central's The Daily Show, Jon Stewart posted his first ever tweet in support of the Reddit crowd on Jan. 28. Among other things, he also said we clearly hadn't learned from the financial crisis.
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!!
We've learned nothing from 2008.
Love
StewBeef
I went to r/WallStreetBets and saw this post of someone's brokerage account worth tens of millions of dollars in GameStop stock.
That's Keith Gill, or Roaring Kitty on YouTube, one of the first people to kick off this rally. He spoke to The Wall Street Journal, telling his story about how he never expected this to happen.
He posts a screenshot of his share values from his ETrade brokerage every trading day, in what he calls a YOLO ("You only live once") update. Many r/WallStreetBets members cite his holding onto shares despite stock fluctuations as inspiration for them to hold as well. "REMEMBER: If [he] can hold even through a 130% dip, so can YOU," one Reddit user posted as the stock started to fluctuate.
"I thought this trade would be successful," Gill told the WSJ in the story published Jan. 29, "but I never expected what happened over the past week."
This sounds nuts
It is. And just watching it is enough to make your head spin. For example, on Jan. 27, the popular chat app Discord temporarily banned the r/WallStreetBets community from its service for violating its rules against hate speech and glorification of violence. Apparently, some of the nastier elements of the community had repeatedly broken Discord's rules. Discord said the group needed to do a better job keeping control of that behavior.
That appeared to spook investors, who suddenly sent GameStop and AMC stock diving that same time. Soon, the group was publicly available again. And it reversed the ban and promised to work with the community instead.
A little over an hour later, the Reddit community was publicly available again, denizens had created a new Discord chat group, and GameStop and AMC stocks were recovering from their sudden slumps. If you'd put down your phone to watch a movie before it happened, you might never have noticed by the time it was done.
Except you may have seen Elon Musk tweeted about how Discord wasn't cool anymore (Discord eventually reversed its decision.)
OK, and what about The Big Short guy?
Michael Burry is an interesting subject himself. He became famous for betting against the housing market before the great recession kicked in around 2007 and 2008. He'd invested in GameStop, but also said he believed all this behavior was "unnatural, insane and dangerous."
Of course, some of the Reddit members say they see this battle over GameStop as their Michael Burry moment, making it all that much more interesting.
Correction Jan. 25 at 5:52 p.m. PT: Fixed the explanation of short selling to make clear how the process works and that there are different ways to bet against a company's stock price rising.
Former President Trump pulled in $255.4 million in political donations from his supporters in the eight weeks following the 2020 election, according to new federal filings, but much of this money—which was solicited to fund challenges to the outcome based on specious claims of voter fraud—will likely be put to other uses.
Key Facts
The fundraising total was reported in Federal Election Commission filings released over the weekend from WinRed, a platform used by Republicans to process online donations, and doesn’t include fundraising through other channels by Trump’s campaign committee, joint committees with the Republican National Committee and new political action committee, Save America, reports from which were expected to filter in later Sunday.
Trump’s fundraising success ebbed and flowed during this period: As noted by The New York Times, Trump and the RNC raised over $2 million every day on WinRed from the election until Dec. 14, the day of the Electoral College vote, pulling in an average of $2.9 million in the two weeks leading up to that vote.
The number dipped after the Electoral College voted to make Joe Biden president, and then spiked again at the end of the year, as Republicans rallied around the (false) claim that Biden’s win could be overturned when Congress voted to certify the Electoral College’s results on Jan. 6.
Fundraising then dropped off after the deadly Capitol attack when Trump largely stopped soliciting money from his supporters to support his election fraud claims.
Key Background
CNNcalculated that during the first month of Trump’s post-election battle, the president’s political operation sent out 414 fundraising appeals via email and 132 by text message. Hundreds more were sent before Jan. 6, with many directing supporters to an “Election Defense Fund,” according to a tracker of the emails. Though the pitch in many of the messages was to help finance Trump’s unfounded—and ultimately unsuccessful—legal challenges to the election outcome, it’s unclear yet how much of the money actually went toward this cause. Bloomberg reported that as of Dec. 4 the total spent on overturning the election by the Trump campaign was $8.8 million. The fine print at the bottom of some emails disclosed that large portions of the donations would go to Trump’s leadership PAC, Save America, which was created in the days after the election. Unlike contributions to a regular PAC, money in leadership PACs can be used “to fund basically anything,” explains the Washington Post’s Philip Bump.
Crucial Quote
“The money in the Save America PAC, unlike money contributed to a standard campaign committee, can be used to benefit Trump in innumerable ways,” wrote Bump. “Memberships to golf clubs. Travel. Rallies. Even payments directly to Trump himself, as long as he declares it income.”
Surprising Fact
The Republican National Committee will also take a chunk out of the fundraising sum, according to The New York Times, which reports that roughly 25% of the funds raised through Trump’s email and texting operations will go to the RNC
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