Not every Wall Street titan got clobbered. 29, One analysis of implied interest, determined that GameStop could rise 20% per day into March. There may be more to come, despite a decline that began on Jan. One financial data firm gauged losses by the end of January at $23.6 billion. 29, 2021 – At this point the financial cost to the short-sellers was colossal. And the upshot of that was that the stock rose from below $200 to go into the weekend at $325. The next day it began allowing users to make very limited purchases of GameStop. That forced Robinhood, whose Twitter account once stated, “ Let the people trade,” to back down – somewhat. But the internet reaction was vitriolic, drawing fire from such diverse quarters as Sen. The sudden trading limit caused an immediate 43% share price drop that allowed the hedge funds to cover their shorts at prices that were high but not as high as they would have been absent Robinhood’s intervention. Other platforms experienced similar demands, and responded similarly. After Robinhood limited GameStop trading, the clearing house cut its demand for collateral to $700 million. ![]() The move was a response, Robinhood said, to its clearing house demanding a $3 billion deposit to handle increased risk from heavy trading in some stocks. 28, 2021 – Robinhood, the preferred platform of the pro-GameStop traders, said it was limiting purchases of GameStop shares (as well as those of 12 other companies), in effect halting the retail investors’ short squeeze. At this point, the stock went parabolic, catapulting from $19.93 on Jan. 11 GameStop announced that Cohen and two of his lieutenants, who together held about a 14% stake in the company, were on the board. By now, an epic winner-take-all game of nerves was in full swing. Both sides were aware of what the other was doing. Undeterred, Wall Street increased their shorts. drove rival PetSmart to buy him out and turn him into a billionaire, disclosed buying 9 million shares, or 10% of the company, for $76 million, implying a share price of $8. Meanwhile, Wall Street kept building its short positions.Īugust 2020 – Ryan Cohen, whose success in building online pet food retailer Chewy Inc. ![]() Gradually other regulars in r/WallStreetBets started buying the shares, too. That’s an attempt to drive up a stock’s price to the point where investors who shorted the stock have to bow out by purchasing shares back at exorbitant prices. He also pointed out just how massive the short interest in the shares was, meaning there was an opportunity for a so-called short squeeze. But his continual explanations of why the shares were undervalued began to get traction. September 2019 – A day trader in a Reddit forum known as r/WallStreetBets announced he was going long GameStop to the tune of about $50,000. 1, 2013, shares sold for $54.82 on March 1, 2020, they changed hands for a measly $3.50. Those short positions likely contributed to a share price slump. A few years ago a number of well-heeled financial analysts, such as Melvin Capital, decided the company was terminally ill and so began building short positions on a massive scale to profit from the stock’s expected demise. October 2013 – Shares of GameStop, which sells new and pre-owned video gaming consoles and game titles, have languished for years, a reflection of its struggles, which the pandemic only worsened. A History of GameStop’s Share Price Fluctuations Here’s what happened, how it happened and how to respond.įollowing Reddit trends can occasionally deliver lucky yields but may not be the smartest investing strategy for expert guidance, consider enlisting the services of a trusted financial advisor. 2 it had tumbled to under $100. What we have witnessed is an unprecedented clash between some of America’s financial titans who bet big on GameStop’s demise and a coterie of retail investors convinced that GameStop shares represented value. Then, after closing out January at $328.24 – up from $18.84 at the start of the month – it began February with a nosedive. ![]() 26, 2021, shares of the Grapevine, Texas-based company rocketed more than 1,600%, and in the middle of that ascent briefly tumbled 43%. ![]() GameStop’s (GME) share price convulsions are riveting Wall Street and the rest of the U.S.
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