Can retail investors save Jia Yueting? Faraday Future soared 367% overnight

National Business Daily

2024-05-15 15:27Posted on the official account of Sichuan Daily Economic News

Editor: Zhang Jinhe

On May 14, the stock price of Faraday Future (FFIE, $0.285 / share, market value of $12.162 million) fluctuated abnormally, soaring 190% at the opening, and closed at $0.285 / share as of the close of the day, up 367.21%, ranking second in the United States. The market capitalization recovered to $12.16 million.

The after-hours FF rally continued, and the stock price came to around $0.3699 per share three months ago.

On May 14, the second day after the high-profile return of Keith Gill, the "king of retail investors" in the U.S. stock market, and his return to the social platform X, retail investors launched another onslaught on meme stocks, and the short market continued to be staged in a high-profile manner.

Among them, video game retailer GameStop (GME) and movie conglomerate AMC Entertainment (AMC) shares continued to soar. After a staggering 73% and 77% gains, respectively, on Monday, GME and AMC continued to soar by 60% and 32%, respectively, to record their biggest gains since June 2021 and January 2021.

MEME stocks refer to stocks that have received widespread attention and discussion among retail investors on social media and online forums, causing significant price volatility. This phenomenon is often related to investors' collective interest and emotional investment in a particular stock, rather than analysis based on the company's fundamentals.

Similar to GME and AMC, FF stock is heavily shorted. The data shows that FF has a short-interest ratio of 95%. The short interest ratio of a stock is the percentage of a stock's short sold volume out of the stock float. And once the stock price rises, the pressure of short-covering may cause the stock price to climb further. This pattern is known as the "short squeeze" and has played a key role in the rally of meme stocks during the pandemic.

According to CCTV News, the U.S. government announced on the 14th that it would impose tariffs on Chinese electric vehicles and other products.

Is there some connection between the above two events that happened on the same day? Shen Meng, director of Xiangsong Capital, pointed out to the reporter of Nandu Bay Finance Society that FF is the only Chinese background electric vehicle concept stock developed in the United States, and it may also be the only Chinese concept stock of electric vehicles that will not be affected by the ban.

On May 7, Jia Yueting, founder and chief product and user ecology officer (CPUO) of FF, posted a 6-minute video on his social platform, announcing that he would start commercializing his personal IP.

Jia Yueting said that he decided to stand up and seriously think about becoming a co-CEO with Matthias and sharing responsibilities. Through the commercialization of personal IP, we will try to make some money as soon as possible, part of which will be used to repay debts, and part of it will be used to subsidize car manufacturing. We will strive to support the basic operations of FF. Confidence for investors and shareholders.

On May 30 last year, Jia Yueting officially entered the Douyin platform to build momentum for the launch of FF 91. In one day, Jia Yueting had more than 780,000 fans. As of press time, Jia Yueting's Weibo fans were 15.174 million, and the number of Douyin fans also reached 1.525 million.

However, in response to Jia Yueting's statement, FF issued a statement on the same day (May 7) in response, saying that Jia Yueting posted a video related to the company on social media as an individual and not as a company executive, and the statement in the video was not approved by the company, and any such statement should not be considered as the company's doing. In addition, while the Company understands that the video indicates that Jia Yueting is considering the possibility of serving as the Company's Co-CEO in the event of an appointment by the Company's Board of Directors and appreciates the services he provides, the Company's Board of Directors is not currently considering appointing him as Co-CEO.

On April 25, Jia Yueting posted a video saying that over the years, he has repaid more than 10 billion US dollars for LeTV, and under the US legal system, he no longer has any debts, and he will do his best to solve the debts under the Chinese legal system as soon as possible.

He also said that returning to his homeland as soon as possible is his biggest dream. Anything that can earn money to repay debts, earn money to build a car, build a car to pay off debts, and return to the motherland as soon as possible is willing to work hard.

The daily economic news is synthesized from CCTV News, Nandu Bay Finance Society, Jia Yueting Weibo, Douyin, and public information

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