Fernando is the name used by the person behind the channel / mrwsbetsespanol on Telegram. On the 28th, when soap opera from the Reddit and GameStop foreros It was already a trend in the networks and it was in the entire international press, Fernando wrote his first message. “As I see that many of you want to invest in the Stock Market, I am going to put a title that I think may be interesting and one day I will commit myself to buy shares of that stock (sic.)”, He said. “It is not a recommendation, everyone must be responsible for what they buy. Whoever wants to can ride the wave of my purchase and buy.”
Fernando, who for his channel has copied the logo of a young blonde with sunglasses / WallStreetBets —The forum where the entire original story happened — requested broadcast. He had to reach more people. “We need to increase the group more. So far it’s going very well, but we need more help,” he said. The next day he wanted to make it clear that it was not a group of “PUMP AND DUMP”, the term that defines the activity of inflating a cheap stock to sell it when it has risen in price. In Spain, market manipulation is a crime and, as the CNMV warned last week, it can be punished with up to five years in prison.
The next day, Fernando announced that on Monday —that is, today— he would give more details about the selected value. He concluded his message with an animated “To the moooon🚀🚀🚀🚀🚀”, which is the slang popularized on Reddit to talk about taking “to the moon” to meme stocks (securities that go viral, like the cryptocurrency Dogecoin three years ago).
This Monday after eleven o’clock in the morning, Fernando announced that the chosen value was Tubacex (TUB). Tubacex is a tube company founded in Álava in the 1960s and listed on the Spanish Stock Exchange since 1970. The group, with plants in Spain, Austria, the United States, Italy, India and Thailand, manufactures seamless stainless steel tubes. This same Monday it has presented an ERE that will affect the Alava plants of Llodio and Amurrio and that will mean the dismissal of about 150 people.
Before the news of the ERE was known, Fernando encouraged the followers of his channel – about 7,000 at the time of writing these lines – to invest in the company. He, he claimed, would not do it until February 3. He justified it like this (we selected some phrases):
“Company leader in its sector”.
“Too punished in my opinion by the pandemic”
“Companies the way I like them, with little capitalization that can rise fast”
“With this of the crisis they are putting the scissors. Bad for the workers and good for the shareholders.”
When the newspaper El Correo published that Tubacex raised an ERE, Fernando nodded happily. “Gentlemen, good news for Tubacex investors and bad news for employees. Dismissal of 150 ‘expensive’ workers. Good scissors are getting into the Tubacex managers. Whether we want to or not, producing in Spain is more expensive.” He also shared an article by the economist Gonzalo Bernardos on why when a company makes massive layoffs goes up on the stock market.
Fernando managed to convince the followers of the group. Tubacex’s share price rose as much as 15% during the morning and more shares were bought and sold than on a normal day: 1.4 million, compared to the usual 300,000 average. A Tubacex share cost only 1.31 euros when the market opened and reached 1.50 at noon. Later it fell again and closed at 1.43, a shy 8.1% rise during the session. The rise was not entirely spectacular: Tubacex’s share has been worth 1.58 euros in recent months.
The information of what was happening in Tubacex soon reached Forocoches and the media. It is possible that some users mistrusted Fernando, who suspected that he had bought cheap shares of Tubacex to sell them with the raise and make cash, and let him know. “I am getting tired of the comments of some. I have neither bought today nor a share of Tubacex nor have I sold today nor a share of Tubacex. I simply put my analysis and when I was going to enter, which is still valid,” he said angrily in the group .
What Fernando has done is similar to what happened with GameStop although with some caveats. He does not have a real forum (his channel does not allow others to interact, only he can send messages) nor is he motivated, in principle, by the idea of ”knocking down” bearish funds that bet against Tubacex and want its value to fall. The person in charge of / mrwsbetsespanol has talked with The Economist and he has said that he has a blog where he does stock analysis, that the story “is simple and has nothing to do with GameStop” and that he worries “the same as if he finds a corpse in my house and I have not killed him” that the CNMV investigate his move.
The “pumps” are not new. They became popular with cryptocurrencies. The trader Enrique Moris has published a video in which he explains to a group of ‘dupes’ those who have been caught in a fake group of “pump” how they can fool them like that. The idea is simple: if a share is at one euro, I buy 5,000, I manage to raise its price to 1.5 and I sell, I take 7,500. It is a way to scam without making people feel cheated, summarize experts on the subject to elDiario.es.