The market operator’s surveillance team imposed a circuit-breaker on Airtasker trading in the form of a “two-minute regulatory halt” amid the skyward price movement on Wednesday.
“All stocks have extreme trade range boundaries. ASX takes action to maintain orderliness. Our surveillance team continues to closely monitor trading activity.”
The ASX and Australian Securities and Investments Commission are each monitoring social media forums for unregulated investment advice, scams and content that could influence risky trading behaviour, especially by inexperienced retail investors.
Such surveillance has become a higher priority of global regulators after millions of mostly Millennial and Generation Z day traders organising in a Reddit forum shocked financial markets with a short squeeze attack on hedge funds in January that pushed US stocks including GameStop up more than 700 per cent.
RMIT University senior finance lecturer Angel Zhong said social media commentary was likely to have influenced this week’s Airtasker trading activity. “The high IPO return boosts retail trading sentiment and attracts retail investors,” she said.
“Due to fear of missing out and hot discussion on social media, retail investors seem to be actively buying the shares of Airtasker.”
Dr Zhong, who studies retail sharemarket behaviour, said the heightened trading in Airtasker was historic in its scale and placed it among the 20 most traded stocks on the local sharemarket this week.
“Not every stock receives a similar amount of attention post-IPO. Looking at other recent IPOs, Airtasker experienced the largest increase in volume post-IPO.”
‘Airtasker to Saturn’
The Airtasker IPO and subsequent sharemarket tear were cheered on and encouraged on local social media threads on Reddit and retail investor chat room Hot Copper.
“Let send Airtasker to Saturn (sic),” wrote an enthusiastic member of the ASX Bets sub-reddit on Wednesday, prompting others to follow suit by posting emojis of the planet.
“The real question is when do we start using rocket emojis,” said another, in a reference to the iconic emoticon favoured by Reddit traders during the GameStop saga.
Another posted a lengthy and emotional response to news of the delay of the Airtasker float on Monday. “I’ve been waiting all month for this,” the user wrote. “I definitely think it will be a [rocket emoji]. My spider sensors (sic) are tingling.”
However, the ASX Bets moderators have said “hysterical enthusiasm for a stock … is fine”.
Under the forum’s rules, they would only intervene in the case of attempted market manipulation or “pump and dump” activity, as they did in January when it threatened to ban members for inciting a short squeeze attack on local fund managers.
Airtasker-related discussions on Hot Copper surged, including a thread titled “$2 by Friday” that attracted 230 comments and 31,000 views. Another titled “be aware of pumping” warned fellow investors to do their own research on Airtasker’s fundamentals and ignore the hype.
One inexperienced Millennial investor told the Financial Review his entire friendship group had bought Airtasker shares “for the LOLs”. “It is down almost 20 per cent today but we are having too much fun to care,” he said on Thursday.
However, beyond following the herd on social media, John Winters, chief executive of trading platform Superhero, said many Airtasker traders may have simply been investing in a company they know and like.
“Airtasker stock has been extremely popular on the Superhero platform with 95 per cent of orders on its first day on the boards being buy trades,” said Mr Winters, a former Shaws stockbroker.
“The second day of trading saw around 40 per cent of customers locking in profits following Airtasker’s 70 per cent growth in value.”
The vast majority of Airtasker buyers were under the age of 45, he said.
Broker OpenMarkets, which clears and settles trades on behalf of Superhero and other fintech platforms, saw 12,299 trades of Airtasker shares at an aggregate value of $64 million.
A source on the equities desk of a major investment bank said Airtasker’s trading activity was clearly a case of “retail investors buying and selling to each other”, given CommSec accounts for just 5 per cent of the market by value but accounted for almost a third of Airtasker trades.