GameStop shares were under renewed pressure on Thursday, down 30% to about $ 65, as the video game vendor continued to slide after a social media frenzy boosted its shares by nearly 2,000% from the start. January.
GameStop Actions – which on January 28 amounted to $ 483 a piece – fell 87% in the last week. The unusual sinking fell by more than $ 30 billion in the company’s market value.
Shares rose particularly in late January after amateur investors on the Reddit WallStreetBets panel piled up in stocks, with some traders declaring war on Wall Street hedge funds that bet against the company. The forum has exploded in popularity in the last week, growing to 8 million members.
CBS MoneyWatch reported Monday, that WallStreetBets moderators recently detected a “large amount” of bot activity in the stock recommendation content that was posted in its group.
The GameStop has followed a significant reduction in short interest on shares, which measures how many shares of the company have been borrowed to sell them. Many have pointed out this previously high level of short-term interest and the fact that hedge funds and others betting against video game retailers have been squeezed out, which is why GameStop shares have risen.
The decline in GameStop shares could lead to significant losses for some of the individual investors who followed the positive stock market suggestions posted on WallStreetBets. Keith Gill, the Reddit marketer who claimed to have earned tens of millions of dollars, driving the momentum to invest in GameStop – lost $ 13 million on Tuesday.
The stock prices of other companies that received extensive listing in WallStreetBets also fell sharply. Shares of the AMC Entertainment movie chain fell 12 percent to $ 7.93 on Thursday. The stock, which also fell 40 percent on Tuesday, was up $ 20 last week. BlackBerry shares, which had risen to $ 28 last week, were $ 11.84.
Treasury Secretary Janet Yellin will meet with financial regulators this week to discuss the GameStop mania and its impact on investors and wider markets.
US Interim Securities and Exchange Commission Chairman Allison Herren Lee told NPR on Monday that the stock market regulator is looking into various aspects of the sharp rise in GameStop shares, including whether brokers have acted properly and existed. market manipulations.
—The Associated Press contributed to this report.