Refinery 29
Can shopping brands be Reddit’s next target in the stock market?
Signage outside a Chico’s FAS Inc. store in Fort Myers, Florida, USA, on Monday, March 3, 2020. In the third quarter, total sales increased 14.8% from the thirteen weeks ended on August 1. 2020, driven by robust digital performance and recovering store revenues. Photographer: Eve Edelheit / Bloomberg via Getty Images Beginning on Friday, the redditors of the subreddit r / WallStreetBets began targeting Wall Street short sellers – market makers and hedge funds who are betting on a stock price drop. It all started with GameStop, the reference store for GameCube games in high school. Now that players frequent online stores and thousands of GameStop stores have closed, hedge funds were confident that the retailer’s stock would continue to decline. Therefore, they bet lots of money to make a profit. For those of you who are not familiar with short selling, according to writer Whizy Kim of Refinery29 Work & Money, it works like this: “Step one, borrow someone else’s shares. Step two, sell them immediately. Third step, wait for the stock price to drop and buy the same number of shares you borrowed. Step four, return the borrowed shares and make a profit from the price difference. ”So when the redditors decided to dump their money on GameStop, thereby raising the company’s stock price from $ 18.84 on New Year’s Eve to more than $ 250 at the time of writing, all of the hedge funds involved were forced to sell their shares at a loss. GameStock’s valuation skyrocketed – on Tuesday, its value exceeded $ 10 billion. Quick update on today’s trades: Express Inc: + 245% AMC Theaters: + 230% Blockbuster Video: + 181% GameStop: + 125% Nokia: + 50% Build-A-Bear: + 45% BlackBerry: + 24% Bed Bath And beyond: + 23% Tootsie Roll: + 14% – Jon Erlichman (@JonErlichman) January 27, 2021 The same is happening with other forgotten brands from the 2000s, such as Build-A-Bear, Blockbuster and BlackBerry, which were stored deep in our brains, only to be created in conversations about childhood birthday parties and Brick Breaker. Fashion may also have been a success. According to a tweet from Bloomberg anchor Jon Erlichman, the Express clothing store’s stock peaked at 245% yesterday. Despite the fact that Wedbush analyst Jennifer Redding told Bloomberg that the Ohio-based retailer is “losing money” as a result of the pandemic, more than 350 million Express shares were traded on Monday – a record for the clothing chain – and its stock almost doubled. According to Business of Fashion, Express is not the only fashion brand that can be on Reddit’s radar. The publication speculates that the next achievement of WallStreetBets could be the parent brands. Analysts who spoke to BOF shared that the same small investors from WallStreetBets who bought shares in GameStop, Blockbuster and more, are now preparing to do the same with shares in shopping brands like J.Jill and Chico’s, especially since the restrictions have been put in place to slow the trading of GameStop and AMC shares. Despite the increase in demand for beige and square button-down shirts with high collars and trendy wide-cuffed trousers – comfortable, neutral clothes that attracted mothers in the 90s and 2000s, the stores that were known for them have been fighting over over the years. The pandemic has made everything worse. According to WWD, the parent company of retailers like Chico’s, White House Black Market and Soma lost $ 178 million during the first wave of the pandemic; in December, Retail Dive reported that J.Jill remained at a loss of $ 24.1 million, with a 30% drop in sales in the third quarter. According to Susan Anderson, an analyst at B. Riley Securities who was listed on the BOF, because some fashion retailers have such low market capitalizations, which means it is cheaper to infiltrate their stocks, they are perfect targets for the next round from Reddit’s, “What brand can we bring down Wall Street with next? “Of course, even if the members of WallStreetBets crowd in the shares of J.Jill and Chico, thereby increasing price and value, that does not necessarily mean that any of them will survive in the long run. As we learned from J.Crews and Lord & Taylors around the world, the pillars of shopping malls have failed to capture the interests of the Internet savvy consumer, even before the pandemic. And despite the fact that Diane Keaton-in-Something’s Gotta Give’s aesthetics is in vogue – as shown by the clogs and wavy shirts tending to the right – from where we are sitting, it doesn’t look like the brands that displayed them in the past will be invited to the ride. Refinery29 contacted Express for comment, but had not yet received a response at the time of publication. Like what you’re seeing? How about a little more R29 goodness, right here? Why everyone is talking about GameStop StocksJ.Crew files for bankruptcy What the end of Topshop means for the millennial generation