GameStop stock boom driven by Reddit renegades continues to roil markets

 GameStop stock boom driven by Reddit renegades continues to roil markets

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Wall Street’s wild ride amid a Reddit-fueled GameStop boom continued Thursday, as the renegade traders behind it boosted other businesses, including American Airlines, online trading platform Robinhood froze some transactions and short-sellers reported about $70 billion in losses so far this year.

The tumult began when daredevil amateur traders, many associated with the Reddit forum r/WallStreetBets, pumped money into ebbing companies like brick-and-mortar video game retailer GameStop, in a shot across the bow at large hedge funds shorting the businesses.

Other companies the online kingmakers invested in included AMC movie theaters, BlackBerry, Nokia, swimwear line Naked Brand Group, headphone manufacturer Koss and Bed, Bath & Beyond.

But early Thursday, Robinhood pumped the brakes, freezing its users’ ability to buy stocks in the companies as the market roiled.

The shutdown quickly provoked the ire of the amateur investors, and a class-action lawsuit was brought against Robinhood by users.

It also caught made for strange bedfellows, as voices ranging from conservative Texas Sen. Ted Cruz to self-described democratic socialist Rep. Alexandria Ocasio-Cortez blasted the restriction.

American Airlines stock price

American Airlines stock price

American Airlines stock price surges

AMC Stock price

AMC Stock price

AMC Stock price surges

BlackBerry stock price

BlackBerry stock price

BlackBerry stock prices surge

Nokia stock price

Nokia stock price

Nokia stock prices surge

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“This is unacceptable,” tweeted Ocasio-Cortez, a Democrat representing parts of Queens and The Bronx. “We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.”

She went on to say that, as a member of the House of Representatives’ Financial Services Committee, she would support a hearing into the selective suspension of trading.

“Inquiries into freezes should not be limited solely to Robinhood,” she wrote. “This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations – especially those allowing sales, but freezing purchases.”

The Republican Cruz — typically at the opposite end of the political spectrum from Ocasio-Cortez — retweeted her thread, writing, “Fully agree.”

Dave Portnoy, the outspoken founder of sports and pop culture site Barstool Sports, also weighed in.

Barstool Sports founder Dave Portnoy was one of many vocal critics against RobinhoodGetty Images

“So @RobinhoodApp is saying they are protecting their users from over leveraging and getting burned,” wrote Portnoy. “But somehow it’s okay when hedgefunds literally do the same exact thing. Nobody had a problem then until the hedge funds lost. Now speculating is a huge issue. #frauds”

Additionally chiming in with advice for GameStop investors was rapper Ja Rule.

“Yo this is a f–king CRIME what @RobinhoodApp is doing,” he wrote. “DO NOT SELL!!! HOLD THE LINE… WTF”

Despite the protests, the move succeeded in edging the market back towards the status quo, as prices of shares in all the companies plunged back down toward earth by mid-day.

However, the chaos still put a sizable dent into large traders’ short-selling numbers.

Such traders were, as of Thursday, staring down the barrel of estimated losses of $70.87 billion on their short positions in American companies so far this year, according to data analytics firm Ortex, with a fair chunk of that hit tied to the GameStop rush.

With Wires

From left, Gabe Plotkin of Melvin Capital Management, YouTuber Roaring Kitty, Barstool Sports founder Dave Portnoy and Citron Research founder Andrew Left.New York Post composite

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