The so­cial net­work Telegram has been crowded

The “Reddit Effect” Replicated In The Spanish Stock Market

Tubacex Plant.
Tubacex Plant.

At the end of last month on Wall Street, re­tai­lers or­ga­nized in the Reddit forum fo­cused their ob­jec­tive for boos­ting the stock market value of GameStop (the lar­gest phy­sical video game store in the US). This in­volved mas­si­vely bu­ying sha­res, cau­sing losses of up to $14 bi­llion in one day for large in­vest­ment funds that were bet­ting on the fall. It didn’t take long for Reddit imi­ta­tors to emerge all over the world, in­clu­ding in Spain.

Specifically, in our country, the social network Telegram has been crowded with groups to buy and sell shares in a coordinated way. The Tubacex case (Spanish steel pipe manufacturing company) has been the first target of this group of imitators known in Telegram as “Spanish WS Bets.” After soaring 15% in the stock market following that move, Tubacex has caught the attention of the National Securities Market Commission (CNMV). For the moment, the CNMV claims not to have seen anything suspicious in the stock price. Apart from Tubacex, assets with suspicious movements include silver and several cryptocurrencies.

The CNMV already warned that a phenomenon such as the GameStop case in Spain would constitute market manipulation, with fines of up to 30 million euros up to 6 years imprisonment. However, the truth is that experts are talking about a legal vacuum.

This only leads to even more uncertainty due to the volatility of shares in the Ibex 35 index. It faces the possibility of replicas through massive purchases of shares simultaneously orchestrated by the aforementioned Telegram group.

In recent days, Tubacex has announced several measures to adjust the workforce in its factories to the current market situation of reduced investments and, therefore, of its order book. These measures include the reduction of 150 jobs as well as a Layoff Plan for 650 jobs in the Llodio and Amurrio plants.

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