Hedge funds and short-selling: How and why Gamestop shook the stock market. Social Sharing AP Photo by John Minchillo The stock … Massachusetts regulator William Galvin compared the situation Wednesday to the 1999 tech stock bubble. Starting about six months or so, and even more significantly since mid-January, US video games retailer GameStop’s stock prices have increased 8000 percent from less than $5 to over $350 on Wall Street. ... How Reddit (and GameStop) changed finance: Everything You Need to Know About the GameStop, Reddit, and Stock Market Story, Explained. GameStop share price explained: How GME stock value was driven up in ‘short squeeze’ by Reddit traders A Reddit community has blown up the stock … That caused some short sellers to abandon their positions, helping to drive the stock up more in the following days. WSB takes something of an internet extremist's approach to investing. There's no evidence that any of this is illegal, although Nasdaq CEO Adena Friedman has said stock exchanges and regulators need to pay attention to the potential for schemes fueled by social media. How GameStop Stock Became Hedge Fund's Worst Nightmare After a Reddit-Driven Frenzy Explained. In this video I talk about the latest news involving GameStop stocks, short selling, Reddit - WallStreetBets, Robinhood and MORE! As word spread on its message board that a hedge fund was planning to short sell GameStop’s stock — users decided to get their own back with what is described as a bull raid. The more complex answer is that its stock has become the central game piece in a financial power struggle between a major hedge fund, Melvin Capital, and a group of amateur stock traders who yell on the internet. BAMBOOZLED? Offline, GameStop ― and other stocks that have caught the eye of this community, like Nokia ― are now being referred to as “meme stock.” Reddit isn’t the only place where amateur traders chat, either. Reddit didn't answer questions Wednesday about whether it's in touch with regulators, but it said it prohibits posting illegal content or facilitating illegal transactions. "And it's a perfect storm at a time when lots of people are hurting, interest rates are so low, inescapable student loan debts loom, and every major institution has caught [losses] during a /global pandemic/ over the last year. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. Meanwhile, three of GameStop’s biggest investors gained as much as $US5.5 billion ($A7.2 billion) from the stock frenzy. American stock markets are in a lather. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. Picture: Spencer Platt / Getty Images North America / AFPSource:AFP. Often, a short squeeze ends in a price's falling back to where it was before the drama started. The stock had plunged to $3.25 each last year. The internet has been used to prognosticate about stocks for decades, but there's never been anything quite like the Reddit community called r/wallstreetbets, also known as WSB. The simplest answer is that its stock price has skyrocketed — by somewhere around 8,000 percent over six months. ... Maybe it’s the same mob. BAMBOOZLED? Find out more about our policy and your choices, including how to opt-out. Let’s dig into how the posters became the wolves. Remember how we said AMC Theatres is one of the other companies that has been targeted by short sellers? Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. But the broader concern comes when what are known as retail investors — amateurs buying stocks for their own personal gain — become overly exuberant and inflate stock prices, sometimes by taking out loans to buy shares. There's also Robinhood, the app that is the unofficial stock trading platform of choice for WSB. Increased volume can indicate a short squeeze, meaning people who had bet against the stock either chose or were forced to give up and take losses. It's still in business, but few people expect it to grow again. The past few days in GameStop, Reddit, and the stock market, explained Pedestrians pass a GameStop store on 14th Street at Union Square, on Jan. 28, 2021, in the Manhattan borough of New York. Tesla CEO Elon Musk, the world's wealthiest person, who has also publicly battled short sellers, tweeted out Tuesday, "Gamestonk!" Picture: Bloomberg NewsSource:Bloomberg. The past few days in GameStop, Reddit, and the stock market, explained D’Amore-McKim researchers explain how a group of Reddit investors drove up the falling value of GameStop’s stock. And at least on paper, ordinary investors are making money even if they're not paying attention. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. GameStop has become the battlefield of Reddit vs. Wall Street, with titanic sums being made and lost. It’s the first time a stock is offered for sale to the general population. As the price of the shares rose, more WSB posters jumped on board. ", Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino, Or, as Reddit co-founder Alexis Ohanian put it on Twitter, the GameStop squeeze is "the public doing what they feel has been done to them by institutions.". One big hedge fund, Melvin Capital, needed a bailout as GameStop stock spiked but denied it was facing bankruptcy. A retailer has become the pawn in a game of cat-and-mouse between individuals and wealthy financiers. There may even be a new term for such internet darlings: meme stocks. GameStop shares would go from trading at around $43 (already significantly more than it traded at at the beginning of the year) to as much as $380, becoming one of the most traded stocks on the market along the way. White House Press Secretary Jen Psaki said President Joe Biden’s team was “monitoring” GameStop’s current situation. A NOTE ABOUT RELEVANT ADVERTISING: We collect information about the content (including ads) you use across this site and use it to make both advertising and content more relevant to you on our network and other sites. It lets anyone trade stocks without commission. GameStop and Reddit have taken over the financial world but many are confused about the details of the story. Reddit users were looking to stick it to the “fat cats” of Wall Street. The Reddit group now has 3.7 million members with calls to target the fat cats of Wall Street. Related: GameStop Stock Price Explained: What Exactly Is Going On? The struggling video game retailer's stock has been making stupefying moves this month, wild enough to raise concerns from professional investors on Wall Street to the hallways of regulators and the White House in Washington. GameStop was one of the most shorted of all publicly traded companies. Some people will make millions but others might lose everything because the bubble will burst. Here's a guide to understanding why and what the frenzy means for the stock market. Find out more about our policy and your choices, including how to opt-out. For the most part, investors follow the "buy low, sell high" format when it comes to stocks. GameStop is a video game retailer. Hey all! Tesla, for example, would need 1,600 years of profits to justify its current price-to-earnings ratio, according to a calculation this month. AMC shares were up by 265 percent Wednesday. NEW YORK — It's not just you. There’s no doubt GameStop’s share value will drop significantly. For one thing, the volume of trading has strained the computer infrastructure of online brokerages, including TD Ameritrade, which said Wednesday that its mobile app was handling unprecedented volumes. The top securities regulator in Massachusetts, William Galvin, said he wants to see a 30-day trading suspension of GameStop on the New York Stock Exchange, adding that “small and unsophisticated investors are probably going to be get hurt by this”. Once the stock has dropped, a short position can be “covered” by buying the stock back and returning it to the lender in question. GameStop? Trading was actually halted on GameStop shares nine times on Monday and three times on Tuesday due to the volatility. And somehow, this is all for GameStop, the beleaguered video games retailer notorious for giving gamers pennies on the dollar for their used software. Reddit users were looking to stick it to the “fat cats” of Wall Street. GameStop stock saga explained: The long and ‘short’ of how Reddit users annihilated Wall Street pros The GameStop stock debacle is so very, very delicious. "It's long past time for the SEC and other financial regulators to wake up and do their jobs — and with a new administration and Democrats running Congress, I intend to make sure they do. In what seems like a modern day twist to the Robin Hood story — a gaming company’s stocks have become a batteground between the rich and the poor with Reddit users attempting to bankrupt hedge fund managers. Panda Express fast-food workers allegedly pressured to strip... McDonald says customers can expect more from RSPCA-approved ... European Union will introduce carbon levy on imports from Au... $30 million Powerball jackpot on Thursday winning numbers. BlackRock, which operates mutual funds, may have made billions of dollars from the rise in GameStop shares alone. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. "The current pandemic has created a unique situation where many people who have gotten into day-trading really have no idea exactly what they're doing," he told CNBC. GameStop’s Reddit-fueled rally, explained ... game retailer — which has seen its stock rise more than 20x since March lows — is currently an epic battleground stock, pitting Reddit day traders vs. legacy hedge funds. Well, WSB and now other amateur investors are going after those short positions, hoping to induce a similar short squeeze. On Friday afternoon, trading of GameStop stock was abruptly halted after it saw a Reddit-fueled surge in trading. Stock market? Shares in GameStop ticked up on Jan. 11 after it named three people to its board of directors as part of a deal with shareholders who had been agitating for change. Picture: SuppliedSource:Supplied. And the enthusiasm was still spreading to other well-known consumer brands. In this video I talk about the latest news involving GameStop stocks, short selling, Reddit - WallStreetBets, Robinhood and MORE! The past few days in GameStop, Reddit, and the stock market, explained Pedestrians pass a GameStop store on 14th Street at Union Square, on Jan. 28, 2021, in the Manhattan borough of New York. GameStop stock is on the rise, and a Reddit group called WallStreetBets is at the heart of an unusual meteoritic rise in price. WHY GAMESTOP? CNBC data show that the volume of shares traded — a closely watched indicator of activity around the stock — spiked on Friday. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. GameStop? It was the subject behind the Academy Award-nominated film The Big Short, which starred Brad Pitt, Ryan Gosling and Christian Bale, which revealed how the GFC was triggered by the United States housing bubble. It’s okay, I was too. Amateur investors on WSB have discussed GameStop (which they refer to by its stock ticker abbreviation, GME) for years, but things changed early this year. In the case of GameStop, chatter on massive online trading forums invigorated interest in buying the stock, pushing up the price, which in turn fueled more interest. Billionaire Elon Musk added more fuel to the fire when he tweeted a link to the Reddit message board, which saw GameStop’s stock end the day on Wednesday up nearly seven times its value from where it was less than a month ago. GameStop is a publicly traded company, best known for selling video-game discs and cartridges in shopping malls. Hedge funds and short-selling: How and why Gamestop shook the stock market. Remember those names. "For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price," Sen. Elizabeth Warren, D-Mass., said in a news release. The Big Short starred Christian Bale, but covered a very serious topic. "What it really feels like is the game is stacked against the little guy," he said. Most recently GameStop stock price tripled in value once again after the company's CFO, Jim Bell, was fired by the board of directors. Individuals investors, many from the Reddit sub group that has nearly four million members, have driven the share price up using an app called Robinhood. "r/WallStreetBets is a top 20 Global Hedge Fund with 2.9MM followers under management at $6,200 each and not one boring research report in sight," financial analyst Genevieve Roch-Decter said sarcastically on Twitter. Well the world’s richest man, Musk tweeted “Gamestonk” and a link to the Reddit forum, which pumped about $US4 billion ($A5.2 billion) into the stocks. The stock had plunged to $3.25 each last year. GameStop Stock Price Explained: The Big Squeeze The /r/WallStreetBets Reddit forum is currently 4.7 million members strong at the time of writing, up from 1.8 million on January 18, according to internet archive WayBackMachine . They bought up stock before it could drop in price and rapidly inflated its value. The feud is playing out because of a stock market strategy called “short selling”. And some skeptics point to the situation around GameStop and other companies as evidence that the stock market has reached a dangerous level of enthusiasm and speculation. This is something to believe in," he said. Then a well-known investor called Ryan Cohen took a 13% stake with a plan to shake-up the business. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. The post Gamestop Explained: How Reddit investors took on Wall Street hedge funds appeared first on CityAM. Reddit users were looking to stick it to the “fat cats” of Wall Street. According to analytical firm S3 Partners, short sellers in GameStop were down $US5 billion ($A6.5 million), which included $876 million of losses early Tuesday, reported the New York Post. In this case, thousands of redditors on r/WallStreetBets and other communities identified something strange: more shares of GameStop had been shorted than existed. “This is unnatural, insane, and dangerous.”. Are you following? An anonymous post on Reddit … Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. A shortseller at hedgefund Citron Capital, Andrew Left, said he was being threatened and harassed for betting against the stock. Gamestonk is a reference to GameStop and to "stonk," internet slang for stock. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. There are predictions more big players will need an injection of funds to stay alive. US company GameStop is a brick-and-mortar video game retailer that has been struggling with profits due to store closures, decline in physical sales and the COVID-19 pandemic. At one stage its stock was priced higher than Apple, Facebook, Microsoft and Disney, as it surged by 93 per cent with its shares climbing above $US300 ($A393). Picture: News Regional MediaSource:News Regional Media, Remember our own Margot Robbie in this famous scene from the movie The Big Short. GameStop stock is on the rise, and a Reddit group called WallStreetBets is at the heart of an unusual meteoritic rise in price. Reddit? Ryan Cohen, founder of pet food company Chewy, who recently joined the GameStop board had noted that the company was one of the most shorted stocks after be bought a large amount of shares in August 2020. Let’s take it one thing at a time. “I don’t think this is a fad, it is a generational shift in how people think about investing their money,” John Patrick Lee, ETF manager at VanEck told the New York Post. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. AP Photo by John Minchillo Stock market? GameStop frenzy explained: How small investors on Reddit took on Wall Street ... to the opposite after the sudden rise of GameStop stock. Once the stock has dropped, a short position can be “covered” by buying the stock back and returning it to the lender in question. Late night TV is here to explain. Because short sellers — frequently hedge funds — in essence are betting against a company's success, it can be a risky position. Posting a link to the GameStop Reddit thread, he wrote "Gamestonk!!". WHY GAMESTOP? Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. In 2008, when Volkswagen was in the middle of a trader tug-of-war, it briefly became the stock market's most valued company, but its price settled down eventually. Basically, it’s when investors make a profit by selling stock they think is going to dive in value and then buy it back at a lower price. "CAN'T STOP WON'T STOP GAMESTOP," a person wrote Jan. 14, along with a clip from the movie "The Wolf of Wall Street.". The stock … Right now, the speculation activity is only around a few companies, which isn't that uncommon. "We will review and cooperate with valid law enforcement investigations or actions as needed," Reddit said in a statement. In the case of GameStop, chatter on massive online trading forums invigorated interest in buying the stock, pushing up the price, which in turn fueled more interest. GameStop shares are soon to coming crashing down. Over the long term, a stock's price tends to track with the company's profits, and GameStop's prospects for earnings remain cloudy. And while WSB had gotten some media attention in recent days for its GameStop boosterism, a boom in coverage of GameStop and WSB helped bring the story out of the financial world and more into the mainstream. “A retail trader will not lean on Wall Street to manage their money and I definitely now see an antagonistic relationship between the old guard (Wall Street) and individual traders who are on the rise.”. Picture: Hannibal Hanschke / Pool / AFPSource:AFP. It’s okay, I was too. Offline, GameStop ― and other stocks that have caught the eye of this community, like Nokia ― are now being referred to as “meme stock.” Reddit isn’t the only place where amateur traders chat, either. They're basically bets that the company will fail. The GameStop stock rally is the handiwork of r/WallStreetBets, a Reddit community where people share news, memes and personal anecdotes about playing the stock market. Stephanie Ruhle, Jo Ling Kent, Ezra Kaplan and Jason Abbruzzese, GameStop stock frenzy has Wall Street buzzing: What it means to you, GameStop at the center of a Wall Street tug-of-war, the unofficial stock trading platform of choice for WSB, named three people to its board of directors, overly exuberant and inflate stock prices.
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