Motley Fool Money South Korea vs. Naked Short Sellers
Nov 8, 2023
In this discussion, Bill Mann, a Motley Fool analyst with a keen insight into market nuances, dives into South Korea's ban on borrowing shares to combat illegal short selling. He explores the political backdrop of this decision and its impact on the stock market. Additionally, he examines how Robinhood is shifting its business model amid changing market dynamics. The conversation also touches on the growth challenges faced by restaurant tech company Toast and insights into the current job market trends, including rising part-time work.
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South Korea's Short-Selling Ban
- South Korea's ban on borrowed shares targets illegal naked short-selling by large European banks.
- The targeted short-selling represents a tiny fraction of the overall market, suggesting political motivations.
Impact of Short-Selling Bans
- South Korea's short-selling ban isn't new; they implemented a similar ban during the pandemic.
- This ban shifted market participation, driving institutional investors out and increasing retail investor activity.
Investment Advice for South Korea
- Consider the predictability of market regulation when making investment decisions.
- Unpredictable regulatory environments can decrease investment appeal, even in large markets like South Korea.