Much of professional Wall Street remains pessimistic that GameStop’s stock can hold onto its immense gains.
As of Tuesday, short sellers of GameStop were already down more than $5 billion in 2021, according to S3 Partners. That accelerated the momentum even more, creating a feedback loop. “i’m bankrupting a 10 figure hedge fund with the boys.”īeyond personal attacks, the battle has also created big financial losses for Wall Street players who shorted GameStop’s stock.Īs GameStop’s gains grew and short sellers scrambled to get out of their bets, they had to buy shares to do so. “hey mom i can’t come up for dinner,” another user wrote. “The same rich people that caused the market crash in 2007/08 are still in power and continue to manipulate the market to get even richer, we are just taking back our fair share,” one user wrote on Reddit. There is no overriding reason why GameStop has attracted this cavalcade of smaller and first-time investors, but there is a distinct component of revenge against Wall Street in communications online. “I HAVE NO IDEA WHAT I’M DOING,” adding that they had other things to do. “WHAT IS AN ACTUAL RATIONAL SELLING POINT, (ABOVE 200? 500?) SO I DONT HAVE TO WATCH THIS TICKER EVERY SECOND UNTIL FRIDAY/MONDAY?” one user wrote in a Reddit discussion Tuesday afternoon as GameStop soared.
The size of the losses taken by Citron and Melvin are unknown.īefore its recent explosion, GameStop’s stock had been struggling for a long time. He denied rumors that the hedge fund will fail. Melvin Capital is also exiting GameStop, with manager Gabe Plotkin telling CNBC that the hedge fund was taking a significant loss. “Nothing has changed with GameStop except the stock price,” He also said he has “respect for the market,” which can run stock prices up much higher than where critics say they should be, at least for a while. But Andrew Left, who runs Citron, said that does not change his view that GameStop’s stock will eventually go down. One, Citron Research, acknowledged Wednesday in a YouTube video that it unwound the majority of its bet and took “a loss, 100%” to do so. Two investment firms that had placed bets for money-losing GameStop’s stock to fall have essentially thrown in the towel. The S&P 500 set a record high earlier this week, though it fell Wednesday. It’s also left more investors on Wall Street asking if the stock market is in a dangerous bubble about to pop, as AMC Entertainment, Bed Bath & Beyond and other downtrodden stocks suddenly soar as well. The stunning seizure of power gives some validation to smaller-pocketed investors, many of whom are encouraging each other on Reddit and are trading stocks for the first time thanks to brokerages offering free-trading apps. All the wild action pushed GameStop’s stock as high as $380 on Wednesday, up from $18 just a few weeks ago. Big bets they made that GameStop’s stock would fall went wrong, leaving them facing billions of dollars in collective losses. The funds serving the financial elite are starting to walk away in defeat. On Wall Street, though, it’s become a battleground where swarms of smaller investors see themselves making an epic stand against the 1%. Across most of America, GameStop is just a place to buy a video game.