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Roughly $390m worth of GameStop shares had changed hands before 6am ET, following Keith Gill’s first Reddit post in three years
GameStop shares surged more than 70% premarket on Monday after “Roaring Kitty” Keith Gill, the stocks influencer behind the 2021 retail trading frenzy, returned to Reddit with a post showing a $116m bet on the embattled videogame retailer.
Roughly $390m worth of GameStop shares had changed hands by 5:53am ET, more than the $343m in Wall Street favorite Nvidia, according to LSEG data.
Investors are puzzled about why the stock favoured by home-based investors soared by 104%, and then 85% after hours
GameStop shares more than doubled in afternoon trading on Wednesday, surprising those who thought the video game retailer’s stock price would stabilise after a fierce rally and steep dive that upended Wall Street in January.
The shares soared nearly 104% during the session in which trading was halted several times, then jumped another 85% after hours.
After investors caused havoc on the markets last week in a battle over the shares of a video-game chain, we explore the promise and pitfalls of the apps they used
A year ago shares in struggling US video game store GameStop were worth just $3.25 a pop, yet at the end of last month they had reached $482. This stupendous surge was created by thousands of armchair traders, organising themselves on internet forums such as Reddit, who were attempting to outwit hedge funds who had placed massive bets on the chain’s decline in a process known as short-selling.
This has resulted in billion-dollar losses for some hedge funds, and big profits for traders who cashed out before the stock fell back to less than $100. Many of these speculators were using a new generation of share-trading apps, such as eToro, Robinhood and Trading 212. Have these services tipped the scales of financial power in favour of the little guy? Here we answer some key questions …
The struggling Texas-based video game store chain has been the focal point of a battle by small traders, using forums such as Reddit, to punish Wall Street hedge funds that have bet on certain stocks falling in value. GameStop shares hit a high of $482 last Thursday but slumped to $80 shortly after the market opened. They recovered to $117 by mid-session, but closed down 60% at $90.
Neil Wilson of Markets.com suggests that large investors may also be driving the silver price rally, rather than it simply being caused by retail traders.
He also warns that such speculation is risky, and usually ends badly for some of those who get caught up:
The fact that such a large and liquid market as silver can be targeted by retail investors says much about the shift we are witnessing, though despite appearances this morning it’s going to a lot harder to squeeze silver shorts as the market is so much deeper and more liquid.
We should also note that some bigger smart money may have be front-running this trade to piggyback the rally and further fuelling the move up. (George Soros: “When I see a bubble forming, I rush in to buy, adding fuel to the fire.”)
Allianz’s Mohamed El-Erian has tweeted that GameStop and silver are not the same kind of short squeeze trade (as some WallStreetBets posts have also been pointing out).
El-Erian also cautions that the silver squeeze could undermine the squeeze on hedge funds who shorted GameStop’s shares, as the GME trade depends on keeping retail investors on board (rather than selling to the hedge funds).
.#GameStop and #silver are not the same for those pursuing the short squeeze trade The silver market is much larger; Existing shorts are smaller; Some of the #HedgeFunds that are short #GME are said to be long silver Bottom line: A dissimilar trade that eats away at #GME gains https://t.co/TMfpkr7QDE
The dramatic struggle over video game chain’s shares suggests markets must now contend with a breed of angry, young, networked investors
When Ben, 28, a software engineer from Leeds, bought two shares in US games retailer GameStop for £460, it was for one reason, he says: “When they make the film about this in years to come, I’ll know I was there at the frontline with a bunch of idiots on the internet, trying to bring down Wall Street.”
For Emma Rivers from East Sussex, who invested £1,400 in the same company – having known little about it a few weeks ago – it has all been about sending a message that capitalism has had its day.
App helping to fuel share-buying frenzy allows ‘limited buys’ after a $1bn cash injection to safeguard trades
Shares in companies including videogame retailer GameStop soared again on Friday, as an army of small investors taking aim at Wall Street regained access to amateur share trading platform Robinhood.
The app, weaponised by activist small investors to trap hedge funds in a “short squeeze” that has cost them $20bn on paper by some estimates, had suspended buying of stocks such as GameStop, cinema chain AMC and BlackBerry on Thursday.
The Reddit forum is at the center of a war between Wall Street and an army of small investors over the store – and Jaime Rogozinski is still getting to grips with it
Jaime Rogozinski always knew WallStreetBets, the Reddit forum he founded, was part of something big – but even he wasn’t prepared for quite how big.
Elon Musk ought to turn his hand to printers, and if only Anthony Fauci could sort out US healthcare
The first full week under President Biden and life undergoes an immediate improvement: save for a few pieces about plunging membership at Mar-a-Lago, there are almost no photos of Himself on the front pages. The daily anger spike is gone, leaving in its place a flat, sour, hungover feeling, and a sense of not knowing quite what to do.
Facebook says group, which has 157,000 members, was taken down for allegedly violating policies unrelated to stock price surges
Facebook has taken down the popular Wall Street discussion group, Robinhood Stock Traders, in a move that its founder described as backlash for conversations buoying shares of GameStop Corp and other companies this week.
GameStop, AMC Entertainment Holdings Inc and BlackBerry have been at the centre of a market battle as individual investors coordinating on social media including Reddit, and using trading apps such as Robinhood, bought shares and squeezed hedge funds that had bet that those struggling companies would tank.
You don’t have to be a redditer or a big investor to enjoy these Hollywood blockbusters that double as the perfect educational resource
The GameStop debacle has put the stock market on everyone’s radar this week – even those who rarely pay it any attention. Many are depicting the incident as a David-and-Goliath battle between small investors gathering on Reddit message-boards and Wall Street powerbrokers finding themselves unexpectedly on the back foot at their own game. Billions of dollars are in the balance.
Along with such major news events, though, come the instant internet experts. Let’s face it: most of us understand diddly squat about the stock market and rely on Hollywood to inform us about an industry that it portrays as a place in which, to quote from the tyrannical, fictional Gordan Gekko: “lunch is for wimps”.
Small investors mounting an assault on Wall Street speculators suffered a setback on Thursday as trading platforms banned them from buying more shares in GameStop, spawning conspiracy theories, political intervention and at least one lawsuit.
Amateur trading app Robinhood stopped users from investing any further in GameStop – a US chain of video games stores – and seven other companies on Thursday, after an extraordinary rise in their value, spurred by users of the chat forum website Reddit, that cost some hedge funds billions of dollars.
Analysis: Understanding short-selling enabled amateur traders to beat hedge funds at their own game
The co-ordinated effort by users of the online forum Reddit to drive up the share price of GameStop and other companies is designed to turn the screw on short-sellers.
To the layman, the dynamics at play here can seem dizzyingly labyrinthine.