FFIE Investors: The Perfect Storm Continues! 🌪️

Hey Reddit fam,

Following up on yesterday’s buzz, we’ve seen some positive movement in FFIE's stock price today, signaling that the perfect storm we anticipated might be brewing stronger than ever. Here’s an update on what’s happening and why tomorrow could be even more interesting for Faraday Future (FFIE):

Yesterday's Highlights:

  1. Rule 201 (Alternative Uptick Rule):

    • Trigger: Yesterday, FFIE’s stock price dropped by more than 10%, activating Rule 201.
    • Impact: This rule restricts short selling at or below the current national best bid price for the rest of the day and today. This restriction helps stabilize the stock price by preventing aggressive short selling and potentially forces short sellers to cover their positions, leading to upward pressure on the stock price.
    • Source: SEC Regulation SHO, Harvard Law Review

  2. T+1 Settlement Rule:

    • New Rule: Effective May 28, 2024, the T+1 rule shortens the settlement cycle for securities transactions from T+2 (two business days) to T+1 (one business day).
    • Impact: Faster access to cash and securities, increased liquidity, reduced risk from price movements during settlement, and more efficient markets. This means you get your money or securities quicker, and the market becomes more resilient.
    • Source: SEC Investor Bulletin, AOL Finance

  3. FFIE on the Threshold List:

    • Implications: FFIE’s inclusion on the SEC’s threshold list indicates significant fail-to-deliver issues, possibly due to naked short selling. This brings regulatory scrutiny and potential actions to curb improper trading practices, protecting retail investors from market manipulation.
    • Source: SEC Threshold Securities, NYSE Regulation SHO.

Today's Positive Movement

  • Price Increase: Today, FFIE’s stock has shown positive movement, reflecting the anticipated impacts of Rule 201 and the new T+1 settlement rule. The restriction on short selling and faster settlements are creating a more favorable trading environment.
  • Investor Confidence: Increased regulatory scrutiny and actions against naked short selling are boosting investor confidence, contributing to today’s price increase.

Combined Effects

  • Volatility and Opportunity: With Rule 201 restricting short sales and T+1 speeding up settlements, we’re seeing increased market volatility but also greater opportunities for long investors. If shorts get squeezed due to Rule 201, combined with the efficiency of T+1, it might create a perfect storm for a price rebound.
  • Investor Benefits: Long investors stand to gain from faster settlements, reduced risks, and potential price stabilization or increase due to restricted short selling. The SEC’s monitoring and potential actions against naked short selling could further enhance these dynamics.

What Should You Do?

  • Stay Informed: Keep an eye on FFIE’s price movements tomorrow. If Rule 201 remains in effect, expect changes in short selling behavior.
  • Plan Ahead: Understand how T+1 affects your transactions. Make sure your funds are ready for faster settlements and stay agile to capitalize on quick market movements.
  • Watch for a Short Squeeze: With the stock showing positive movement and regulatory factors at play, a short squeeze could be on the horizon. Be ready for potential rapid price movements.

This combination of regulatory changes, high short interest, and today’s positive movement creates a unique trading environment for FFIE. Stay sharp, and good luck!

Let’s see how this plays out. 🚀🚀🚀

Sources: SEC, Harvard Law Review, AOL Finance, InvestorPlace, Fintel, MarketBeat