This year’s run-up in shares of GameStop Corp. highlights “some of the inherent flaws in the U.S. equity market,” according to Jeff Sprecher, chief executive officer of Intercontinental Exchange Inc. and chairman of the New York Stock Exchange.
Retail stock pickers have been openly coordinating share purchases and sales on Reddit forums, sending the price of GameStop, AMC Entertainment Holdings Inc. and others on a wild series of ups and downs. The development could bleed into other markets such as commodities, Sprecher said on a panel discussion at the annual Futures Industry Association conference broadcast Tuesday.
“You’re definitely seeing the democratization of markets,” he said, without elaborating on what flaws he was referring to.
CME Group Inc. CEO Terrence Duffy said the trading phenomenon raises questions for market governance.
“I don’t know if the regulators were prepared for that,” Duffy said at the event. “If you tell everyone what you’re going to do and you do it, is it market manipulation?”
Most U.S. states have legalized some form of gambling, he said, and the behavior on Reddit is an indication retail investors aren’t looking for regulatory protections.
“The public says: We don’t want to be protected fromourselves. So you have to give them what they want,” Duffysaid. “I think that people want to be in charge of their own destiny.”
Among Reddit favorites, theater company AMC Entertainment soared 26% Monday after announcing plans to open its California locations, while clothing company Express Inc. jumped to the highest level since January. Both companies dropped Tuesday.
Wall Street had been bracing for a flurry of trading from individual investors flush with $1,400 payments from the government’s $1.9 trillion pandemic-relief bill.
