Fads fade. It is in their very nature. And while it isn’t yet totally clear that the retail rush into the stock market on the part of millennial newbies with stimulus checks burning a hole in their Robinhood accounts, there’s some worrying data pointing in that direction.
It has been two weeks since the Treasury Department started sending $240 billion worth of electronic payments to households…. Daily equity purchases by individual investors have remained stable at around $11 billion in recent weeks on a 10-day rolling basis, data from flow tracker VandaTrack shows. This is sharply different from what happened in April 2020, when checks immediately led to a jump in retail flows, or January of this year, when the impact was also clearly noticeable two weeks in…. Thanks to vaccinations and lockdowns easing, there are more ways to spend money recklessly away from home. Chase figures suggest that the largest increases in card payments were registered in lodging establishments, restaurants and retail stores.
This is especially bad news for something else which was already starting to look an awful lot like a fad, blank-check companies. Like meme stocks, cryptocurrencies and fractional shares of collectibles, these have enjoyed quite a boost from the Redditor set. But the SPAC glut already seems to be sapping investor interest, and with banks, law firms and the SEC groaning under the weight of paperwork for countless new SPACs, those hopeful entries may not make it to market before people have better things to do with their time and money than hand it over to a professional athlete promising to make a really great deal with a company unable or unwilling to go public via normal channels.
The pipeline of SPACs rushing to market is getting so clogged that bankers, lawyers and auditors are turning away business as they struggle to keep pace, according to people familiar with the matter. As founders of blank-check companies wait in line, the deep-pocketed investors needed to take them public have grown squeamish…. Some financial firms, including Deutsche Bank AG, have slowed new SPAC IPOs, people familiar with the matter said….
The SEC’s processing of SPAC documentation is taking longer than it previously did. In some cases, agency staff have warned lawyers that it may take a full 30 days to review paperwork and to expect an additional two weeks to hear back on changes or amendments, according to people familiar with the situation./One problem, another person said, is that more filings are arriving incomplete or containing errors. The agency is also contending with a barrage of phone calls from lawyers asking questions on their deals.
The brainchild of Satoshi Uehara, the pseudonym used by a popular investing influencer on Twitter, Stock Pickers was set up in early March after a crowd-funding campaign which took in more than $50,000 -- nearly six times its goal.
The bar has been almost full nearly every day since it was opened, said Riki Yamauchi, a finance professional and the bar’s PR manager, even though Stock Pickers was launched when Japan was still in a coronavirus state of emergency.
Yamauchi said many younger investors come to meet Uehara, who has attracted a following on Twitter for his advice on how to get started in investing and understand stock valuations. More seasoned traders also come to offer their investing savvy to newbie traders, said Yamauchi of the bar.
If People Aren’t Bored Anymore, What Happens to the Stock Market? [WSJ]
SPAC Listings Slow to a Crawl With Bankers Buried in Paperwork [Bloomberg]
Reddit-Inspired Retail Traders Open Tip-Trading Bar in Tokyo [Bloomberg]
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