In late January, a band of Reddit-obsessed retail traders coordinated trades on heavily shorted stocks, created a massive short squeeze in GameStop, whose shares surged 400% at one point. The brick-and-mortar retailer traded at less than $20 a share at the start of 2021.
Similarly, Is GameStop stocks a good buy?
GameStop is down 70% from record highs but remains a high-risk bet for investors given its negative profit margins and falling revenue.
Did GameStop crash the stock market? Key Facts. Shares of GameStop plunged 32% Wednesday after lukewarm earnings that met analysts’ expectations, wiping out more than $4.5 billion from the firm’s market capitalization, which ended Wednesday at $8.1 billion.
Thereof, Was GameStop stock manipulation?
Although simply purchasing GameStop stock is not inherently deceptive, they undoubtedly manipulated the stock price. However, even in jurisdictions that recognize open-market manipulation liability, it is dubious the Reddit traders intended to improperly manipulate the market.
What happened with GameStop and Reddit?
GameStop stock climbed by 104% until trading was halted for a second time – moments before markets closed. The rapid rise came as Reddit, the online home of activist investors that led the GameStop movement in January, went down temporarily. The stock gained nearly 90% in after-hours trading.
Why did Redditors Buy GameStop?
Motives behind this onslaught ranged from making personal profit to a desire to squeeze the short positions of hedge funds. Prompted by the information posted on social media retail investors began buying these so called “meme-stocks” including GameStop, AMC Entertainment, Blackberry, and Nokia.
What Reddit investing?
With more than 2 million users and a catchy tagline (”Lose money with friends!”), r/investing is one of the largest and most frequented investing subreddits on Reddit. This group covers everything from general stock market questions to how to choose an online brokerage account to the coolest ETFs to buy in 2022.
How did Reddit break the stock market?
An army of traders on the Reddit forum r/WallStreetBets helped drive a meteoric rise in GameStop’s stock price in recent days, forcing halts in trading and causing a major headache for the short sellers betting against it and banking on the stock falling.
Who started the GameStop stock Reddit?
Michael Burry, The Hedge Fund Genius Who Started GameStop’s 4,000% Rise, Sold Before Its Reddit Surge. A problem occurred. Try refreshing the page. Michael Burry, the hedge fund investor who built a massive position in GameStop before it became a meme stock on Reddit and skyrocketed, sold his entire stake in late 2020.
Why did everyone buy GameStop stock?
WallStreetBets members wound up being right about the squeeze, and GameStop bulls notched incredible gains as short-sellers were forced to buy back the stock at elevated levels in hopes of avoiding massive losses.
What is GameStop scandal?
Popular investing app Robinhood became the focus of the controversy after it decided to freeze trades for GameStop on Jan. 28. Shares of the video game retailer spiked after traders on Reddit began frantically buying the company’s stock. GameStop shares have since came crashing down only to shoot up once again.
How did GameStop stock soar?
GameStop shares skyrocketed in January as retail investors, urged on by popular Reddit forum WallStreetBets, bought the stock as a way to punish hedge funds that had taken an outsized short bet against it.
Will Reddit go public?
Reddit has filed confidentially for an IPO, the company said. Reddit could make its stock market debut in March, Bloomberg reported. The social media company could seek a valuation as high as $15 billion. Reddit will reportedly work with Morgan Stanley and Goldman Sachs for its IPO.
Can I buy Reddit stock?
Reddit is currently a privately held company, so its stock does not trade on any public exchange. You may be able to buy pre-IPO shares on private share marketplaces, but availability is uncertain and there may be qualifications.
How much will Reddit stock be worth?
Reddit was valued at $9.6 billion in August 2021, more than triple its 2019 valuation of $2.7 billion. Now, using a $15 billion IPO valuation and considering the most current ad revenue figure of $100 million in Q2 2021 and the current annual run rate of $400 million, its price-to-sales (P/S) ratio would be 37.5.
What happened with GameStop stock in simple terms?
Amid the first COVID-19 lockdown in March 2020, GameStop stock dropped to a value of $2 to $4 per share, the lowest in the company’s history. Much of this was due to GameStop stores being closed. The low value of GameStop’s stock gave birth to an idea to manipulate the stock market.
What drove up GameStop stock?
Shares of GameStop jumped more than 30% to a high of $104.65 on Tuesday. The stock turned sharply higher after Social Capital’s Chamath Palihapitiya said in a tweet that he bought GameStop call options betting the stock will go higher. Trading was halted multiple times due to volatility.
Did Reddit almost crash the market?
Day-Trading Reddit Users Nearly Crashed the Stock Market. Now They’re the Organizing Principle for a New ETF. Barron’s.
Why is GameStop stock still high Reddit?
The driving forces behind the stock having skyrocketed to a high of around $350 per share in Q1 included (1) frequent Reddit mentions, (2) significant coverage on mainstream media, (3) large volume changes and, to a lesser extent, (4) elevated short interest.
Did Michael Burry buy GameStop?
Burry bought a stake in GameStop in 2019 because he determined the stock was undervalued. He penned three letters to the video game retailer’s bosses, urging them to buy back shares and clean up their act.
How much did GameStop Reddit guy make?
At GameStop’s record high last week, Gill’s total return in the name ballooned more than 2,000% to as much as $33 million, according to his Reddit posts. However, the short squeeze in GameStop started to fade this week, taking a big bite out of Gill’s massive gains.
Who owns GameStop stock?
Top 10 Owners of GameStop Corp
| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 7.65% | 5,837,633 |
| BlackRock Fund Advisors | 6.28% | 4,794,611 |
| SSgA Funds Management, Inc. | 2.17% | 1,653,929 |
| Geode Capital Management LLC | 1.01% | 773,880 |
Who bought GameStop stock?
March 22 (Reuters) – Billionaire Ryan Cohen’s investment company bought 100,000 shares of GameStop Corp (GME. N), according to a regulatory filing on Tuesday, sending the videogame retailer’s shares 16% higher in extended trading.
Is GameStop still a short squeeze?
The dollar volume shorted in GME stock at the end of January 2021 was $4.1B and has since decline significantly. Today, about 24% of GameStop’s float remains collectively shorted by different investors. Most of them are likely still hedge funds but it remains unclear at what point a short position was initiated.
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