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‘Korean version of the game stops movement’ already has side effects
“A Donghak ant is weak, but short selling is nothing if we join in ‘Kstreetbets’.”
The stoppage of gambling situation that rocked the US stock market has also spread to the domestic stock market. The plan is to take photos of companies with short selling problems, such as Celltrion and ABC, and wage a short selling war against institutional investors.
However, the noise is already increasing on the reasons for selecting a specific stock and position changes. Some point out that blind purchases by individual investors can expand due to fluctuations in stock prices that are unrelated to corporate value, leading to market distortions. The side effects of “Group Think”, which lack criticism from members, also raise concern.
◇ What is the probability of success of ‘K-Streetbets’? = The Korea Stock Investors Association (Korea Stock Investors Association), a group of individual investors, is leading the Korean version of the short selling war. Han Too-yeon declared an anti-public selling war and called it ‘K-Streetbets’ (KSB), imitating streetbets, which refers to individual investors participating in GameStop. KSB reported that more than 1,500 subscribers were gathered within a day after opening the official website.
KSB cites Celltrion and HLB as representative short selling companies. Whenever the share price of the two companies fell, individual shareholders said they were “surprised by the short selling.”
The actual short selling balance is also the highest in the KOSPI and KOSDAQ markets. According to the Korea Exchange on the 2nd, Celltrion’s short sales balance as of the 27th of last month was 2,146.4 billion won and HLB’s 3,138 billion won.
KSB’s representative operator said: “If short selling is allowed as in developed countries, instead of ‘abolishing short selling unconditionally’, the purpose of competing by creating a system similar to that of developed countries. In the case In the United States, when selling short, the margin is 140%, in 30 days. There are conditions for redemption, but in Korea there is no margin limit or redemption deadline, so individual investors compared to institutions are destined to be at an absolute disadvantage. “
Currently, KSB participants are conducting anti-short selling campaigns in various forms, such as smartphone stock purchase authentication and meme campaigns using SNS. There are also photos of the stock purchase certification of affiliates such as HLB Life Science and Celltrion Healthcare, which have a lower market capitalization than HLB and Celltrion.
◇ What is the connection between Tooyeon Han and Celltrion? = Some have pointed out that Han Too-yeon is a group of genuine Celltrion shareholders, and whether the group is gathering a large number of unspecified investors to promote profits. The invitation to participate in the share price rise is a price control.
The Korea Investors Association was founded by the folks from Hope Sharing Shareholders Association. Jeong Eui-jeong Han, CEO of Too-yeon Han, also serves as a director of the Hope Sharing Shareholders Association. The Hope Sharing Shareholders Association is a group of genuine shareholders of Celltrion, a biopharmaceutical company established in 2017. It presents itself as a non-profit organization where Celltrion shareholders come together to support a variety of health and social welfare services for groups. vulnerable infants, toddlers, children and youth. Representative Jung also published a book entitled ‘The Miracle on 23rd Street’ and told the Celltrion story from the perspective of minority shareholders.
One official drew a line that read: “It is not the purpose of this campaign against abbreviations, although the trainers of the Hope Sharing Shareholders Association have established Hantooyeon with the cooperation of Kyungsilyeon.
◇ Donghak smart ants will be buried in collective accidents ‘Concern’ = On Han Tooyeon’s website, there are often mixed articles such as ‘Let’s sell anti-auction with Seegene’ and ‘Selling shares is a total sale’. There are already many examples of certification of negative returns. Experts worry that this could fall into the trap of collective accidents.
When collectivism flows to the extreme, collective thinking is often formed. Irving Janice, who worked as a professor in the Department of Psychology at Yale University, defined groupthink as a situation in which members of the organization tend to induce consensus so that they cannot think critically. Once formed, it means accepting the thoughts of the members without criticism. People outside the group are rejected and this can lead to the pursuit of the group’s goals only.
The attitude that individual investors band together and dismiss the short selling forces as an enemy, and that they must eliminate them unconditionally, raises concern. It is explained that if the zombie company remains in the market by being swept up in populism, it can further distort the market.
Columnist John Flender Financial Times said: “Capital misallocation also appears to be a rapid rise in companies struggling like GameStop to allow borrowing. It could have the effect of leaving the company and inhibiting the creative innovation that is the foundation of dynamic capitalism. “We must not forget that hedge funds have also played a central role in exposing the weaknesses and fraudulent practices of Enron, Lehman Brothers and Wirecard.”
