World-Beating 55,000% Surge in India AI Stock Fuels Bubble Fears (thehindubusinessline.com) 23
The world's best-performing stock is turning into a cautionary tale for investors chasing outsized returns from the AI boom. From a report: Little-known until recently even within its home market of India, RRP Semiconductor Ltd. became a social-media obsession as its shares surged more than 55,000% in the 20 months through Dec. 17 -- by far the biggest gain worldwide among companies with a market value above $1 billion.
That's despite posting negative revenue in its latest financial results, reporting just two full-time employees in its latest annual report, and boasting only a tenuous link to the semiconductor spending boom after shifting away from real estate in early 2024. A mix of online hype, a tiny free float and India's swelling base of retail investors drove 149 straight limit-up sessions, even as exchange officials and the company itself cautioned investors.
The rally is now showing signs of strain -- and regulators are taking a closer look. The Securities and Exchange Board of India has begun examining the surge in RRP's shares for potential wrongdoing, according to a person familiar with the matter who asked not to be identified discussing confidential information. The $1.7 billion stock, recently restricted by its exchange to trading just once a week, has fallen by 6% from its Nov. 7 peak.
That's despite posting negative revenue in its latest financial results, reporting just two full-time employees in its latest annual report, and boasting only a tenuous link to the semiconductor spending boom after shifting away from real estate in early 2024. A mix of online hype, a tiny free float and India's swelling base of retail investors drove 149 straight limit-up sessions, even as exchange officials and the company itself cautioned investors.
The rally is now showing signs of strain -- and regulators are taking a closer look. The Securities and Exchange Board of India has begun examining the surge in RRP's shares for potential wrongdoing, according to a person familiar with the matter who asked not to be identified discussing confidential information. The $1.7 billion stock, recently restricted by its exchange to trading just once a week, has fallen by 6% from its Nov. 7 peak.
Now's the time! (Score:4, Insightful)
Sell your shirt and jump onto the bandwagon, the profits are literally guaranteed.
Re: (Score:3)
Why would I want 55,000 shirts?
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To give to those who lost them, obviously. But who told you you're getting any?
Re: Now's the time! (Score:2)
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[Kramer: "Good point"]
"Fears"?? (Score:2)
Fuels Bubble Fears
Fears? More like "Predictions" or "Certainty".
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RRP Electronics vs RRP Semiconductor (Score:4, Interesting)
There's a well funded company called RRP Electronics which is working on package and test. They also have a famous cricketer as a strategic investor, whatever that means.
This RRP Semiconductor was a trading company which renamed itself and changed its business model.
As far as I can tell, the latter's revenue is nothing to write home about. And it's a Public Limited company which makes this even more weird, as those are expected to pass much more stringent criteria.
Shades of the Harshad Mehta era.
Re: RRP Electronics vs RRP Semiconductor (Score:1, Troll)
When you have 1.4 billion with avg IQs hovering in the late 70s, what can one expect from their stock market? There is no scope for rationality.
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Are we still talking India, or is this about the West? Because have you seen what goes on in the West, where the economy is measured by how the stocks are doing, while peoples lives are getting shittier by the day, and a third of the stock market is an AI bubble that is going to bring everything down once it pops. Talk about IQ...
In any case, there is not scope for rationality on the stock market anywhere. It's a glorified casino, where the house always wins, and the rare success is about predicting where t
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Market is easily manipulated in India with hardly any consequences if caught. There are shops that create vast pools of gullible, uneducated day traders (akin to bot nets), who can be used to orchestrate stock moves by sending "trading signals" via SMS. There are many more nuances to these pools, based on gullibility index, trade size capability of the individual etc. These pools are sold to other fronts who orchestrate the front running, pump and dump operations. This used to happen with large cap stocks t
Pump and Dump (Score:5, Insightful)
A few people will soon get very rich, a large number of suckers will lose their shirts.
Re: Pump and Dump (Score:2)
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Instead of doom-mongering, make money (Score:1)
For the record, I think the AI crash will come. Selfishly, I mainly hope it comes because Sam Altman is a cunt.
But the problem is when will it come ? : Tomorrow, within a year, within 3 years, in more than 3 years, never ?
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All the doom-mongers posting these stories would surely make a better use of their time by investing in shorts on all these companies ?
Invest what exactly? Most people don't have disposable income to gamble on bullshit like this
Re: Instead of doom-mongering, make money (Score:2)
Remember when Wallstreetbets was doing gamma squeezes with money earned from handjobs behind the dairy queen?
Re:Instead of doom-mongering, make money (Score:4, Interesting)
Because making money off a short trade is actually quite difficult even if you know for a fact that the stock will crash.
The problem with going short is you can't just be right on the direction the stock will go, you must also get the *timing* right. In a naked short position, you can lose substantially more than you investment if the stock increases. When the stock increases beyond certain thresholds, you will start facing margin calls. You could easily go bankrupt before the stock crashes if it were (for example) to go up another 10,000%. Doesn't matter if it goes to zero a month later- if you can't make the margin call you just lost your shirt. You can mitigate this risk with options, but you still need the get the timing right. If you buy puts at the current trading price and the stock hasn't gone down when the put expires, you just lost your investment.
Michael Burry of the "big short" actually almost went bust before making money. If the mortgage crisis had been delayed just a couple of months he would have gone bust waiting for it to happen. Likewise, the same Burry is short on AI and just had to close his fund last month because his forecast crash hasn't happened.
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It is incredibly difficult to make money shorting a stock. They charge you rent for the shares you borrow. Unless you get the timing right you lose money even when the stocks goes down.
If these trends continue... (Score:2)
Disco Stu [youtube.com] approves.
Bubble bubble bubble (Score:2)
Stocks going up? That's a bubble!
Stocks going down? We told you it's a bubble!
Stocks staying the same? Probably also a bubble.
Trading volume? (Score:2)
There are about 13.6 million shares floated for this company. The highest trading volume in the last year was about 2000 shares, but most days see less than 100 shares traded. This stock has essentially no real-time market for shares. As such, the price of its last trade should not be taken as a notion of its value or even its capitalization. It's more like a house that is sold once every few decades and find a crazy person who pays an inflated price. That inflated price does not mean that the house is