Alternative Data Can Offer Insight into GameStop Action on Wall StreetJanuary 28, 20211 min read
Thomas Shohfi, an assistant professor in the Lally School of Management at Rensselaer, says that looking at alternative data can offer important insights into the turbocharged trading of GameStop.
“Volatility in options on GameStop, Nokia, and AMC is exploding,” says Shohfi. “Short sellers are taking massive losses, covering their positions and pushing the stocks even higher. WallStreetBetters keep looking for soft spots in the hedge fund short portfolios to ‘blow up’ their value again and again. It’s a mob-fund mentality.”
Working with a former student, Shohfi has analyzed trends from the WallStreetBets subreddit and other social media platforms. He can provide an astute understanding as to how investors have reached this moment, why this has happened, and what the impact that this event will have in the future.
“Practitioners, investors, and analysts are always looking for an advantage,” according to Shohfi. “The biggest advantage that we see today is through alternative data. It’s just a rich environment to observe human behavior, incentives, and gender and disclosure effects that affect capital markets like we have seen with GameStop.”
Thomas D. Shohfi Assistant Professor of Accounting and Finance
Leading research into Alternative Data sources in analysis of stock markets. Director of the Student Managed Investment Fund at Rensselaer.