Wednesday, December 1

GameStop Stock Price Fall Is Sending WallStreetBets Redditors Ballistic


Reddit’s favorite GameStop isn’t looking that hot this week and some of the stock’s biggest backers are freaking out.

After selling strongly throughout the week, the stock fell another 42 percent overnight.

Wallstreetbets Reddit group led the push to raise GameStop’s share price. (Shutterstock)

“Stop Selling GME,” is the headline of a thread on the WallStreetBets forum, home to the Reddit army that boosted the game retailer’s share price in recent weeks.

“We have the advantage. All we have to [do] is to buy and hold shares, “wrote one of the users.

Robinhood briefly imposed restrictions on trading on GameStop last week.

Both Citadel, the hedge fund, and Citadel Securities have denied any role in this decision.

In another part of the forum, another said: “To any [hedge fund] plants in the submarine trying to break [WallStreetBets]: For you. I am not selling We are not selling “.

Traders of the day chatting on Reddit who have supported GameStop with its buying frenzy have inflicted serious pain on hedge funds who are shorting the company and betting the stock price would drop.

Shares in GameStop have slumped this week, but continue to rise significantly throughout the year. (AP)

GameStop is down nearly 84 percent so far this week, though it’s up nearly 184 percent so far this year.

Last week, the small contraction forced hedge fund Melvin Capital to secure a bailout of more than $ 2 billion ($ 2.6 billion) from the hedge fund Citadel to make ends meet.

To make matters more confusing, Chicago-based Citadel Securities, a different entity owned by the same billionaire, Ken Griffin, is under scrutiny for its relationship with the Robinhood trading platform that is popular with retail investors.

“Never forget that Citadel stole from you. They are, and never will be, your friends or part of a healthy or fair financial system,” wrote one Reddit user.

Robinhood briefly imposed restrictions on trading on GameStop last week.

Both Citadel and Citadel Securities have denied any role in this decision.

“Citadel Securities has not instructed or caused any brokerage firm to stop, suspend or limit trading or refuse to do business,” the company said in a statement to CNN Business.

“Citadel is not involved in or responsible for any retail broker’s decision to go out of business in any way,” added a spokesman for the hedge fund.

Professional investors are also getting a grip on Reddit: Thinknum Alternative Data provides clients with real-time data on stocks being discussed on Reddit to avoid another short squeeze.

Pedestrians pass a GameStop store on 14th Street in Union Square, New York.
Pedestrians pass a GameStop store on 14th Street in Union Square, New York. (AP)

“Fourth quarter earnings will show up to us. The question is, will there be enough people to fight the shorts to force another squeeze,” wrote one user.

The company’s fourth-quarter earnings won’t be released until March 25, enough time for the stock to fall further.

“They told me on my first day on Wall Street, ‘You don’t have friends on Wall Street, and if they tell you you have friends, you’re wrong,'” Mohamed El-Erian, Allianz’s chief economic adviser, said on the live digital show. from CNN Business, Markets Now, this week.

The next chapter in the GameStop Reddit saga could be all about regulation.

Treasury Secretary Janet Yellen is holding a meeting with Wall Street’s watchdogs to investigate the phenomenon.

It remains to be seen what steps those regulators will be willing or able to take.


www.9news.com.au

Leave a Reply

Your email address will not be published. Required fields are marked *