GameStop shares plunge 50% as WallStreetBets traders face billions in losses
Source: CBS Market Watch
GameStop's stock price plunged on Tuesday, falling more than 50% to around $110 a share at mid-day. The drop also signaled that the popular WallStreetBets Reddit stock market discussion board a major force behind last week's spectacular rally in the troubled video game retailer's shares and others'may be losing its magic to move the market.
The GameStop drop followed a large reduction in short interest on the stock, which measures how many of the company's shares have been borrowed to sell. Many had pointed to that previously high short interest, and the fact that hedge funds and others betting against the video game retailer had been squeezed, as a reason GameStop's shares had soared.
Read more: https://www.cbsnews.com/news/gamestop-stock-gme-down-losses/
But you stuck it to "the Man" so it's all good.....
sboatcar
(415 posts)A few people made a killing on it, the rest are going to lose so much.....and to what end? Nothing is going to change.
ProfessorGAC
(64,995 posts)...of the original bettors who organized this were anything other than making their own killing on the backs of their retail investor "brethren".
The "stick it the hedgers" motto rings hollow, knowing some of the ground floor organizers made 400% on their money.
sboatcar
(415 posts)aggiesal
(8,911 posts)you've made 1900%
$2000 investment would have yielded $38000
The big money investors are the ones that made the killing.
$52,600 would have yielded $1,000,000
I hope the Congressional Hearing about this produce something good out of all this.
Shorting stock is betting on failure, which is so negative to me.
ProfessorGAC
(64,995 posts)I don't think shorting should be allowed.
Selling stock one doesn't own is ridiculous, no matter how artfully it's justified.
My 4x was assuming the low buyers got out during the tumble, not before it.
But, your numbers are accurate.
FakeNoose
(32,633 posts)... don't take financial advice from Reddit, as a rule.
aggiesal
(8,911 posts)they jump in the deep end with both feet and then get out.
These Reddit investors may have succeeded in destroying at least 1 hedge fund maybe 2,
but the "institutional" investors, that took a chance, made a killing on GME.
Thomas Hurt
(13,903 posts)Calista241
(5,586 posts)All they have to do is prevent companies from being leveraged for more than their market cap. Problem solved, and hedge funds will actually have to work for a living.
ProfessorGAC
(64,995 posts)...shares to sell needs to be regulated as well. You either own them or not. Don't own them, can't sell them.
I don't think regs against the markets being a keno game are out of line.
paulkienitz
(1,296 posts)The most important single change to make is to ensure that when you buy a company, any debt taken to finance it is owed by the buyer themselves and not by the company they now own.
aggiesal
(8,911 posts)Wouldn't that put Romney (or Rmoney) out of business?
That's basically how he bankrupted Toy-R-Us
https://theweek.com/articles/761124/how-vulture-capitalists-ate-toys-r
IronLionZion
(45,427 posts)After major market crashes that make headlines, SEC has put in limits on things like short selling and trading on securities without taking delivery and so on. Then they end those policies because wall st. claims they need it to correct pricing of overvalued securities.
Their lobbyists actually convince regulators that they need to "kill off the weak" to "strengthen the herd" or some nonsense like that when really they are just getting fabulously wealthy without contributing much to our economy.
paulkienitz
(1,296 posts)Sure, we cheer when some shitposters manage to screw privileged bankers, but look at the broader picture. They created a stock bubble that blew up, and then popped, and the results are exactly the same as when anyone else creates a bubble: the canny ones get out early and make a fat parasitic profit without having contributed a damn thing to society, while all the enthusiasts who see the bubble in the news get converted from stakeholders to bagholders.
We need to treat the entire practice of stock speculation and daytrading as an evil to be stopped. Short or long doesn't matter, banker or citizen doesn't matter, NOBODY should be making their money this way. Tax every trade.
Freethinker65
(10,009 posts)Now do something about it to level the playing field for all who care to invest in the market.
My Pet Orangutan
(9,238 posts)The Hedge funds wanted to make more sending Gamestop et al. broke.
Same diff. Don't talk to me about f'ing fundamentals.
Roc2020
(1,615 posts)very deliberate and careful about what company they short sell now or else their loses could destroy them. Good to know.
ripcord
(5,346 posts)No matter what kind of a run GameStop stock had their business model has failed and it isn't worth anymore than it was before all of this.
bucolic_frolic
(43,128 posts)or thought I understood, market manipulation is illegal. I recall reading exactly such a scenario about 2002. It's a classic pump and dump scheme. That being said, there are trading rooms all over the internet that target a few specific stocks each day, have a following, and together they move stocks. Their biggest players make money, and they're done working by 10 or 11 am. One said he made 424K on SunEdison in one day when it rebounded from its low.
Little investors get preferential order treatment. When they enter an order, the market maker or electronic system is required to look for a better price for them. They have an advantage if they use limit orders in that sense. Market orders rarely get the best price available in my opinion.
mdbl
(4,973 posts)bring back interest savings accounts so I don't have to play these ridiculous games.
Roy Rolling
(6,911 posts)The Mouth
(3,148 posts)JonLP24
(29,322 posts)Gamestop is still useful if you want to buy consoles (as long as they are not sold out and the next gen consoles are often sold out) or accessories.
ripcord
(5,346 posts)Big box stores and online retailers sell consoles for less, the reason local stores were popular was they were places people could hang out and discuss games with the staff and each other. GameStop doesn't require staff to be knowledgeable about games anymore and they aren't big on "loitering" so they have no real advantage.