Retail Investors are Reshaping Markets and Politics
How leaders oscillating between business, politics, and media are creating a new era of voter mobilization
Retail investors are increasingly shaping both capital markets and political landscapes. Their growing influence is driving market dynamics, proxy contests and they are becoming a pivotal voting bloc for political candidates. Business leaders, political figures, and media moguls are increasingly merging these roles, using strategies that blur the lines between capital raising, governance and voter mobilization. Robert F. Kennedy Jr., an independent candidate for the 2024 presidential election, invested $24,000 in GameStop to align with the retail investor community and advocate for stronger regulatory oversight on Wall Street. Former President Donald Trump has reversed his stance on cryptocurrency, now embracing crypto donations and pledging industry support, positioning himself against Biden's regulatory approach and potentially attracting a new voter base. Vivek Ramaswamy, a former Republican presidential candidate, has taken an activist position in BuzzFeed BZFD 0.00%↑ , pushing for major restructuring and advocating for the company to leverage its strong social media presence. Tesla is actively engaging its retail investor base, which holds a significant portion of its stock, by offering incentives like factory tours to mobilize support for Elon Musk’s $46 billion pay package. In Japan, individual investors are contributing to the yen's decline through substantial foreign securities investments, complicating efforts to stabilize the currency. These developments and more underscore a global movement of retail investor participation that is influencing capital flows, economic policies, and political strategies.
Robert F. Kennedy Jr. invests $24,000 in GameStop in apparent play for ape vote (MarketWatch)
RFK Jr. Engages Retail Investor Community: Robert F. Kennedy Jr., an independent candidate for the 2024 presidential election, pledged to bring greater transparency, stronger regulatory oversight, and tougher penalties for Wall Street misdeeds.
GameStop Investment: To show his commitment, RFK Jr. revealed he invested $24,000 in GameStop using legal fees from a lawsuit against Monsanto, aiming to align himself with retail investors and meme stock culture.
Meme Stock Appeal: Kennedy's use of popular retail investor language and a "Planet of the Apes" styled faux movie poster highlights his attempt to resonate with the retail investor community on platforms like Reddit and X.
Influence of Retail Investors: The 2024 election could see retail investors emerge as an influential voting bloc, marking the first U.S. presidential election since the 2021 GameStop movement and the push for fairer markets.
Trump’s Suddenly All About Crypto. What Changed? (The Defiant)
Trump's Pro-Crypto Stance: Former President Donald Trump has reversed his earlier criticism of cryptocurrency, now embracing crypto donations and pledging support for the industry. He promised to commute the sentence of Bitcoin marketplace creator Ross Ulbricht and prevent crypto talent from leaving the country.
Skepticism and Support: The sudden shift has left the crypto industry divided. While some see it as a genuine move to garner votes, others, like Adam Cochran, view it as pandering. Experts highlight the potential impact of Trump's promises, including the possibility of dismissing SEC crypto lawsuits.
Political Strategy: Trump's new stance positions him against Biden's perceived anti-crypto approach, leveraging the Biden administration's regulatory actions to rally support. His campaign criticizes key figures like Senator Elizabeth Warren, framing the narrative as a battle for financial freedom.
Bipartisan Shift: Trump's embrace of crypto has influenced a bipartisan shift in legislative attitudes, with two crypto bills gaining support. Prominent Democrats, including Senate Majority Leader Chuck Schumer, have diverged from Warren's anti-crypto stance, indicating a broader acceptance of the industry.
Ex-Presidential candidate Vivek Ramaswamy buys big into BuzzFeed, calls for shakeup (Yahoo! Finance)
Ramaswamy's Stake and Recommendations: Vivek Ramaswamy, holding an 8.37% stake in BuzzFeed, is calling for a major restructuring of the company, including staff cuts and the addition of three new board members, urging action by July 15.
Investment in Video and Audio Content: Ramaswamy advocates for BuzzFeed to invest further in creator-led video and audio content, leveraging its competitive advantage in these areas to redefine the brand around the pursuit of truth and attract a diverse range of political viewpoints.
CEO's Response: BuzzFeed CEO Jonah Peretti acknowledges the brand's undervaluation but disagrees with Ramaswamy's proposals, defending the company's current strategy and its Pulitzer Prize-winning journalism. Peretti remains open to further discussions with Ramaswamy.
Ramaswamy's Conservative Advocacy: A wealthy biotech entrepreneur and conservative advocate, Ramaswamy has pushed back against progressive corporate practices through his investment firm, Strive Asset Management, and his writings on corporate America's social justice initiatives.
Ramaswamy's campaign underscores the continued politicization of capital markets, where public figures freely oscillate between political campaigns and business enterprises, leveraging the same audience to propel both their political and business ambitions.
Tesla is offering shareholders factory tours with Elon Musk as it pushes to approve his big pay plan (Quartz)
Tesla's Efforts to Boost Shareholder Engagement: Ahead of the vote on Elon Musk’s $46 billion pay package, Tesla is actively engaging shareholders by offering a guided tour of its Austin factory. Shareholders who vote and prove ownership by June 8 are eligible for the tour.
Voting Eligibility and Incentives: Tesla has specified that only shareholders who owned stock before April 15 and do not disclose their vote are eligible for the tour. Fifteen shareholders will be selected for the tour, scheduled for June 12, with the annual meeting on June 13.
Musk's Pay Package Under Scrutiny: Shareholders will re-vote on Musk's pay package, which was previously struck down by a judge. The package, initially valued at $56 billion, is the largest executive compensation package in history and was originally approved by 73% of shareholders in 2018.
Global Marketing Initiatives: To boost sales, Tesla is offering factory tours as incentives in China and the U.S. Chinese consumers who buy cars between May 25 and June 30 can win a tour of the Fremont factory. Tesla is also promoting test drives in China, offering a trip to its Shanghai gigafactory.
Inside Donald Trump and Elon Musk’s Growing Alliance (WSJ)
Advisory Role Discussions: Donald Trump and Elon Musk have discussed a potential advisory role for Musk should Trump win the 2024 election. This role could involve influencing policies related to border security and the economy, reflecting Musk’s growing vocal stance on these issues.
Voter Fraud Initiative: Musk and billionaire investor Nelson Peltz have briefed Trump on their plan for a data-driven project aimed at preventing voter fraud. They also detailed an influence campaign targeting business leaders to dissuade support for President Biden’s re-election.
Renewed Relationship: The relationship between Trump and Musk has significantly improved, with the two now talking several times a month. They have held discussions on various topics, including immigration, technology, and the U.S. Space Force, aligning more closely on their views and interests.
Elite Influence Campaign: Musk is leveraging his influence among elite business circles to support Trump and oppose Biden. He has co-hosted secret gatherings with powerful figures like Rupert Murdoch and Peter Thiel to strategize discreet support for Trump and emphasize Biden’s perceived shortcomings.
Why communication is key to winning proxy fights (Axios)
Heightened Scrutiny from Activist Investors: Companies are facing increased scrutiny from activist investors on various issues, including leadership, mergers, strategy, and ESG policies. Effective communication becomes crucial when activists campaign for shareholder votes.
Changing Communication Strategies: The traditional proxy communication playbook is evolving to cater to younger investors who consume information differently. Companies now use digital marketing, graphics, videos, and social media to reach retail investors while maintaining traditional media channels for institutional investors.
Proactive Reputation Building: To mitigate activist attacks, companies are enhancing communication efforts, sharing more about board decisions and personal credentials. Engaging third-party endorsements from business leaders and academics is also key to influencing investor opinion.
Importance of Proxy Advisers: Winning support from influential proxy advisers like Institutional Shareholder Services (ISS) and Glass Lewis is critical in contested situations. Effective messaging and presentation to these advisers can significantly impact the outcome of shareholder votes.
Retail investors to hold rally to protest stock trading income tax (Korea Times)
Candlelit Vigil by Retail Investors: Retail investors, organized by the Korea Stockholders Alliance (KSA), will hold a candlelit vigil on Thursday to protest the planned enforcement of a capital gains tax on stock trading income. The rally is set to take place in front of the Democratic Party of Korea (DPK) headquarters in Seoul.
Tax Details and Opposition: Starting next year, a 20% tax will be applied to incomes from trading stocks, funds, bonds, and financial derivatives exceeding 50 million won ($36,630). The KSA argues that this tax will heavily burden retail investors and cause a significant downturn in the stock market.
Political Deadlock: Previous legislative efforts to address the tax have stalled due to a deadlocked National Policy Committee following the People Power Party's defeat in the April 10 general elections. A bipartisan agreement is needed by August to prevent the tax from being implemented.
Debate on Economic Impact: President Yoon Suk Yeol has promised to scrap the tax, citing potential major losses and capital outflows for the 14 million retail investors. However, the DPK argues that eliminating the tax would worsen income inequality, labeling it a "tax cut for the rich."
Why is Japan's yen falling? Retail investors are one reason (Nikkei Asia)
Influence of Japanese Individual Investors: Japanese individual investors are now a significant factor in the yen's continued slide, complicating efforts by authorities to stabilize the currency.
NISA Program Impact: The revamped Nippon Individual Savings Account (NISA) program has driven substantial foreign securities investments, with over 4 trillion yen ($25.7 billion) invested in the first four months of the year. This shift to global equity funds means selling yen to buy other currencies, contributing to the yen's decline.
Revival of the Yen Carry Trade: The yen carry trade, where investors borrow yen at low interest rates to buy higher-yielding currencies, has also contributed to the yen's drop, particularly after Japan's Golden Week holidays. Reduced perceived risk in currency movements has further encouraged this trade.
Challenges for Intervention: Despite suspected interventions by the government and the Bank of Japan totaling around 8 trillion yen, the yen's depreciation trend has proven difficult to reverse, indicating the limited effectiveness of such measures in the current market environment.
The Dow hit a record 40k under Biden. Will it impact the election? (Baltimore Post Examiner)
Mixed Economic Performance: Under President Biden, inflation has risen by 20% since January 2021, making it difficult for many Americans to afford essentials. However, inflation has decreased from a peak of 9.1% in 2022 to 3.4% today, and the unemployment rate remains just below 4%, a near-record low.
Stock Market Success: Equity investors are thriving, with the Dow Jones hitting a record high of 40,000 in May, and the S&P 500 and NASDAQ Composite also at record highs. The stock market has grown by 45% since Biden's election, compared to a 34% increase during the same period in Trump's presidency.
Voter Trust and Perceptions: Polls indicate voters trust Trump more than Biden on economic issues, and Biden is trailing Trump in key battleground states. Despite the stock market's success, many Americans still feel the economy is in recession due to lingering high prices and economic inequality.
Impact of Economic Gains on Political Success: Experts suggest that while the stock market's performance is strong, it may not translate into political gains for Biden. Many voters do not feel the positive effects in their daily lives, and economic benefits are not evenly distributed, leading to widespread dissatisfaction.
Trump Media asks Louisiana to investigate trading of its shares (Reuters)
Investigation Request: Trump Media and Technology Group (TMTG), owner of Donald Trump's social media platform Truth Social, has asked the Louisiana Office of Financial Institutions to investigate alleged "illicit activities" in the trading of its shares, particularly focusing on market manipulation and potential violations of Louisiana Securities Law.
Concerns Over Short Sales: TMTG's letter highlights a significant number of short sales and failures to deliver (FTDs) in recent trading. Data showed that FTDs exceeded a million shares on 11 trading days between April 9 and April 30, peaking at over 2.3 million FTDs on April 29.
Market Volatility: Since its Nasdaq debut, TMTG's stock has experienced significant volatility. Initially soaring by as much as 59%, the stock has since reversed those gains, currently valuing the company at about $9 billion.
Financial Performance: Despite the high market valuation, TMTG reported minimal revenue of $770,500 for the March quarter and an adjusted operating loss of $12.1 million, leading many investors to predict a potential decline in share value.