KUALA LUMPUR- Malaysian retail investors are looking to buy stocks of medical glove manufacturers, encouraged by the recent rally at U.S. company GameStop Corp., to push up their share prices and squeeze out short sellers.
As amateur United States investors poured in and pressured hedge funds to lose billions on their short positions, GameStop shares have soared 1,700 percent in just two weeks.
Reddit’s WallStreetBets site, where small investors anonymously debate stocks, is seen as having fuelled the GameStop rally.
Malaysian retail investors discussed buying up stocks of glove makers in a new forum on Reddit called BursaBets, founded on Thursday, and complained about share prices have fallen in recent months as the profits of the companies increased.
Malaysia is the largest manufacturer of medical gloves in the world, the demand for which has increased due to the pandemic of COVID-19.
“Whoever is still holding gloves (has) already been through hell, join me by saying ‘eff you’ to investment banks, fund managers, market manipulators, and everyone else,” said an user called ‘_Revenant_’ who started the BursaBets forum.
Bursa Malaysia is called the national stock exchange.
“We’re gonna be fighting in our markets tomorrow,” the user said, adding that WallStreetsBets has inspired “us to bring our market back into our control”.
Top Glove – the sort of the largest glove making organization – and short positions in the sector were the subject of discussions in the forum in a major way.
By borrowing them for a fee and selling them in order to buy them back at a cheaper price, investors see short stocks as vulnerable to weakness. They will have to buy back at a higher price if the stock continues to increase.
If the price increase is unsustainable, those betting on a rise also risk losing their investment in a subtle way.