Video game retailer GameStop’s stock price has been on a rollercoaster this week due to the actions of users on the WallStreetBets subreddit and the subsequent blocking of their ability to buy stock by several online brokerages.
The Reddit users pushed the stock up from $20 on 11 January to a high of $146.97. At its peak on Thursday morning, the stock was valued at 468.49. Other stocks with a similar profile to GameStop - firms that have struggled in the pandemic - have also soared in value including Bed, Bath & Beyond, AMC, and Nokia.
The decision by online brokerage Robinhood and others to stop the purchase of a number of stocks by amateur investors led to a sharp backlash online and a demand for an investigation by both market commentators and lawmakers.
After the morning surge in value in pre-market trading, stock in GameStop dropped sharply as markets opened on Thursday, before climbing again. By lunchtime it was down 32 per cent, eventually closing down 44 per cent wiping out almost $11bn in market value.
However, Robinhood announced it will allow limited purchasing of the restricted stocks on Friday causing a bump in the value of shares after the closing bell.
Was this Wall Street’s equivalent of a populist uprising as some are saying or were other forces at work? Elizabeth Warren questioned the David vs Goliath narrative in her calls for more regulation and a sharper toothed SEC.
Both the House and the Senate will now hold hearings into what transpired.
Follow all the latest in our rolling coverage.
- GameStop shares surge 40% before dropping sharply as Reddit-fuelled rollercoaster continues
- GameStop: Reddit users claim victory as $13bn hedge fund closes position, accepting huge losses
- ‘You stand for everything I hate’: Reddit WallStreetBets posts open letter to Wall Street Hedge Funds
- How the internet is reacting to GameStop, Reddit and Wall Street debacle
- GameStop: How a fight between Reddit users and Wall Street saw video game company’s stock increase tenfold
