Wall Street thinks the Reddit-fueled GameStop trade unravels


January 29, 2021: According to executives and traders of a major Wall Street firm, the fight amid the hedge funds and retail investors on shares of GameStop has a conclusion.

Shares of GameStop, the videogame retailer, have raised more than 900% since starting, members of a Reddit community called WallStreetBets banded together to make the stock higher.

The campaign pushed a stock worth $19 at the initial of the year to $482.85 on Thursday.

For the first time, shares of GameStop fell in six trading sessions on Thursday, tumbling 44% after Robinhood and Interactive Brokers restricted activity in GameStop and a few other names.

The shares are rebounding sharply on Friday, other 80% in premarket trading to $332 a share after Robinhood reversed course and said limited purchases of the stock is allowed.

According to FactSet data, despite costing hedge funds billions of dollars, GameStop remains one of the most shorted stocks in the market. More than 120% of available shares of Gamestop have been borrowed, down from about 140% this month.

Mini-bubbles in stocks, including GameStop, are just the latest sign of unusual activity in markets since the coronavirus pandemic struck, forcing central banks to unleash trillions of dollars in support of economies around the world.

With millions of Redditors wielding free trading apps, full saving accounts, and not much else to do, there may be a new playbook for fast gains in the stock market.

Robinhood’s move on Thursday to limit its users’ ability to bid up Reddit investors GameStop and other companies targeted drew bipartisan criticism from lawmakers who said that the brokerage was favoring large institutional traders over small investors.

Editor's Choice

Posts You Might Like

Leave us a message


Fill the form our team will contact you

Advertise with us

Fill the form our team will contact you​