GameStop won’t stop, Fink presses CEOs on climate plans, and billionaire Black to step aside: This Week in Finance

Welcome to This Week in Finance, your weekly roundup of the conversations trending among financial professionals on LinkedIn. Click Subscribe to be notified of each edition. This week:

GameStop saga's latest developments

GameStop continues to rattle the investing world. Shares of the beleaguered electronics-store chain jumped 68% Friday, bringing gains this month to about 1,700%, thanks to a band of traders who organized in a Reddit forum. Movie-theater operator AMC Entertainment experienced similar gains, with a 278% bump in stock price to end the week. While the David vs. Goliath tale of Reddit users vs. hedge-fund managers sent the markets into a tizzy, the aftershocks may be long-lasting.

• Melvin Capital Management, the hedge fund that's taken a blow from GameStop and other heavily shorted stocks, lost 53% in January, The Wall Street Journal reported.
• Billionaire investor and New York Mets owner Steve Cohen is taking "a break" from Twitter, saying he and his family received "personal threats" tied to his firm's investment in Melvin, which bet against GameStop and had to receive nearly $3 billion in emergency cash.
• While Robinhood raised $1 billion to meet its need for cash, the SEC said it would review the trading restrictions that it and other brokerages put in place.
• Robinhood on Friday continued to adjust trading limitations for a group of volatile stocks. The company was hit with a class-action lawsuit alleging it "deprived their customers of the ability to use their service."

• Lawmakers on both sides of the aisle pledged to hold hearings on market instability, the role played by hedge funds, and the restrictions implemented by brokerage platforms.
• Some hedge funds that practice short selling have already begun adjusting their operations. Prominent firm Citron Research said it will stop offering short-selling analysis after two decades of providing the service.
• See what people are saying here and here.
• See what professional investors are saying here and here.

• GameStop frenzy hits Asia: In Korea, some mom-and-pop traders have leveraged so heavily that brokerages have cut off their financing, while in Thailand, cannabis-related stocks jumped. In Japan, the heavily shorted Rakuten and Pigeon gained late in the week, while Malaysians on Friday drove up the shares of glove maker Top Glove.
• Companies stunned by soaring shares: A tiny mining company in Western Australia saw its shares soar more than 50% on Thursday — leaving directors "stunned." The unexpected move occurred because GME Resources' ticker symbol on the Australian Stock Exchange matches that of GameStop on the New York Stock Exchange: GME.

The worst U.S. growth since 1946

It's official: The U.S. economy shrank 3.5% in 2020 despite a pickup in the second half, marking the worst performance since 1946. Preliminary figures from the Commerce Department show that growth slowed in the final three months of the year to 4%, below what economists had forecast. The Federal Reserve on Wednesday kept its easy monetary policies in place, saying the resurgence of COVID-19 cases has hit business activity and that the next few months will be "a struggle." ?? Here's what people are saying.

• See what economists are saying about China's rise as the top destination for foreign direct investment here.

Virus job losses dwarf 2009 crisis

The equivalent of 255 million full-time jobs were lost last year due to the pandemic, four times the number during the 2008-2009 financial crisis, the International Labour Organization said in a new report. A total of $3.7 trillion in earnings evaporated globally in 2020, the report noted. Women and young workers were hit the hardest, while Southern Europe was among the regions that faced a particularly steep decline in working hours. The ILO expects an additional 15 million jobs to be lost in Europe in 2021, according to its baseline scenario.

• China and the U.S. are expected to see the strongest rebound from the coronavirus crisis, according to a report from the IMF. Europe and other advanced economies are predicted to lag behind, while emerging economies are set to be hit worst. ?? Here's what people are saying.

• Job confidence at pandemic high: According to LinkedIn data, fewer U.S. workers expect the number of available jobs to decrease in the near future, while more are reporting confidence in their employer's future.

• E-learning keeps some out of work: Only 47% of parents with children who are distance-learning or partially in school are working full-time, compared with 71% of parents whose children are back at school, according to a new study.
• Record store closures forecast for 2021: A record 10,000 U.S. stores could close this year as pandemic-related lockdowns and restrictions hit brick-and-mortar businesses, according to Coresight Research. The figure would mark a 14% jump from closures in 2020, when some retailers were able to hold out by renegotiating agreements with landlords.
• Rich-poor divide grows in pandemic: The world's poorest could take a decade to recover financially from the pandemic, but a report by Oxfam shows it took the world's top 1,000 billionaires just nine months to recoup their fortunes as the crisis lays bare "the greatest rise in inequality since records began."

Prepare for net-zero economy: Fink

The world's largest investment firm, which owns pieces of companies in every corner of the globe, is calling on them to "disclose a plan for how their business model will be compatible with a net-zero economy." In his annual letter to CEOs, BlackRock CEO Larry Fink said he expects business leaders to share how those strategies fit into their business models and are reviewed by their boards. Following Fink's 2020 letter, companies including Microsoft (LinkedIn's parent), Salesforce, and Delta Air Lines unveiled plans to reduce or eliminate their carbon footprints. The annual letters "have consistently helped change the topic of conversation in corporate boardrooms," notes The New York Times. ?? Here's what people are saying.

Finance titan steps down amid review

Billionaire investor Leon Black, the founder and CEO of buyout firm Apollo Global Management, will step down after a review by his board found he paid disgraced sex offender Jeffrey Epstein $148 million for financial advice. While the review concluded that Black didn't participate in any of Epstein's criminal activities, the volume of payments created a rift between Black and his co-founders, according to The New York Times. Co-founder Marc Rowan will become CEO when Black cedes the job "on or before" July 31, Apollo said, adding that Black will remain chairman. ?? Here's what people are saying.

—With Monica Fike, Riva Gold, Lynn Chouman, Jake Perez, Yunita Ong, Capucine Yeomans, Alexander Besant, and Pieter Cranenbroek.

What's your take on the week's news and other developments impacting you or your business? Join the conversation in the comments below.