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Fast and loose

I avoided as much news as possible during my week away, because most of it appears to be useless propaganda these days anyway, and would just make me cross. Even so, no amount of self-imposed isolation could have defended my consciousness from the furore over vaccine passports. Is there no escape from this madness?

Having been dismissed out of hand as conspiratorial nonsense by vaccine minister Nadhim Zahawi in February, the possibility of vaccine passports is inching closer to becoming a reality. In an evasive press conference, Boris Johnson spoke of Covid status certification, and played fast and loose with answers to questions over how extensively such health certification would be required. It remains a possibility that you’ll need to prove Covid status to enjoy a pint or buy some new socks, hardly helpful for two industries that have been absolutely flattened by lockdown, as Harriet Clarfelt discusses. I will perhaps start enjoying the news more as the rebellion gathers momentum – civil liberties matter, even if the propaganda tells you otherwise. And I need some new socks. 

Another story that made it through my defences was the Deliveroo IPO. Its shares tanked on flotation as institutions were said to have shunned the offer because of the apparent exploitation of its delivery bikers – a lovely virtue-signalling opportunity if ever there was one, even if the reality is that the price was wrong for a company that stretched the definition of tech unicorn well beyond breaking point, as Phil Oakley observed at the time

Some of those workers are on strike as we go to press, coinciding with the first day of retail dealings – a sign of the growing disquiet among the staff of many tech companies where trade unionism is starting to take hold. I would be worried if I was a shareholder – employee power isn’t a bad thing, but as Lauren Almeida writes this week, it could prove a growth dampener alongside broader regulatory threats, even if the prospect of British-Leyland-style capital destruction remains some way off. 

That hasn’t stopped retail punters piling in of course, one of the main features of pandemic share trading. In the US, retail trading rose to hit 25 per cent of all volume, helped along by zero-commission trading and free government money (well, free in some sense at least) and having a demonstrable effect on the market performance. According to one research paper, the $65bn deposited at Robinhood could have lifted the market by around a percentage point. That may not sound very much, but the effect on individual stocks has been far more pronounced, not least Tesla whose shares are still up 570 per cent in a year despite recent selling pressure. 

But the retail phenomenon is also having some interesting impacts on somewhat more traditional stocks. Take the anti-Tesla, Volkswagen, for example. Putting its emissions scandal behind it, the company is careening hell for leather down the autobahn towards an electric future, and many suspect it may eventually leave Tesla in the dust. Among them are the infamous WallStreetBets brigade, who have been ploughing into one of the German car giant’s two share classes and opening the widest discount ever to its second share class. The story is a complicated one explained in more detail by Megan Boxall, but it is a glaring example of how a stampeding bull market is capable of missing important nuances and distorting markets to breaking point. Drive carefully.