Felipe Zahr wanted to be part of history. So after watching GameStop Corp.’s eye-popping 1,625% run in January, he joined in on the action.
The 18-year-old student from Guanacaste, Costa Rica, snapped up $928-worth of GameStop shares Monday using his father’s investment account, when the stock was trading around $232, he says. A day later, he has already hit the sell button, almost half of his original investment gone.
“It was a social experiment, it most certainly was not a smart investment,” said Zahr. “It was a gamble.”
He’s just one of a horde of traders who loaded up on left-for-dead stocks in the past few weeks, egged on by members of Reddit’s WallStreetBets forum. And for a time, it all worked. Their enthusiasm drove up prices and volatility so much that Robinhood Markets and other brokerages were forced to clamp down on trading.
The 50 stocks that Robinhood originally put on its restricted list had added $276 billion in value from the end of 2020 to the height of the recent mania, according to data compiled by Bloomberg. But now, $167 billion has been wiped out in just a matter of days, and there’s little sign the pain is easing.
GameStop plummeted 60% Tuesday to $90 a share, bringing its two day loss to 72%. It fell another 2% in late trding. Koss Corp. fell 43%, after a 45% drop on Monday. BlackBerry Ltd. slid 21%, while AMC Entertainment Holdings Inc. fell 41%. An equal-weight basket of the 50 stocks originally restricted by Robinhood plunged almost 10% in the worst day since it peaked on Wednesday.
If anything, the last few days have served as a reminder that in spite of a popular mantra that they do, stocks don’t always go up. As millions of new members joined the now infamous r/wallstreetbets forum and GameStop entered the world’s cultural lexicon, it wasn’t difficult to find quick-trade winners bragging about their gains online.
Yet now, boom is rapidly becoming bust in one of the more remarkable stock-market stories of the last decade, as stocks including GameStop and AMC spiral. Boasting has taken on a different tone. Using WallStreetBets’ members’ own terms, it’s “loss porn,” not screen grabs of account surges, that now litters the space.
“Anything can turn sinister if people go in with the wrong education and intentions,” said JJ Kinahan, chief market strategist at TD Ameritrade. “The education of risk, risk, risk, risk. Because I’ve got to be honest, I don’t know anybody who’s not comfortable with reward.”
Still, calls abounded for day-traders and Redditors alike to hold onto their positions. One post on WallStreetBets with 2,100 comments read, “THE DIP IS FAKE. LOOK AT HOW MANY PEOPLE ARE BUYING COMPARED TO SELLING. RELAX AND HOLD.” In an “Ask Me Anything” session with the subreddit Tuesday, billionaire Mark Cuban encouraged the forum to hold onto their GameStop shares if they could afford to do so.
After all, while $167 billion in value has been zapped from the popular stocks in a matter of days, the group is still up more than $100 billion since the start of the year. On average, those companies’ shares are still up 72% in 2021. It’s a reminder of the difficulties, and yet significance, of market timing. Anyone who bought a few days ago at the top has likely been burned, while early comers are still sitting on sizable gains.
Noah Williams, 36, of Atlanta, says he still owns 1,100 shares of GameStop. He originally got in at $16 a share and gradually took profits as the stock surged, and says he paid off his student debt. Since then, he’s held on even as the swings are starting to get wilder.
“I’m still up on GameStop -- I’m not worried about that,” said Williams. He added: “I’m not buying anymore. I’m good.”
For Jordan Neumayer, 24, the GameStop saga is more than just a game. Last week, the engineer and part-time Twitch streamer sold his original investment in the stock at $128 a share, after buying in a month ago, when GameStop was trading around $20 -- pocketing a tidy profit or what the forum’s members call “tendies,” short for chicken tenders. But after he sold, Neumayer decided to buy in again, scooping up shares at $280.
Asked about the bout of seller’s remorse, he said: “Tendies looked tasty, took them out of the oven. Hedge Funds thought they could run the show and stop us ‘normies’ from buying, so now I’m back in and it’s personal.”
GameStop closed below $100 a share Tuesday for the first time in over a week.
“It’s money that I’m not afraid to lose,” Neumayer said from the greater Los Angeles area. “It’s like going to the roulette table and putting it all on black.”
"lose" - Google News
February 03, 2021 at 04:46AM
https://ift.tt/39HOR21
Reddit Meme Stocks Including GameStop (GME), AMC Lose $167 Billion - Bloomberg
"lose" - Google News
https://ift.tt/3fa3ADu https://ift.tt/2VWImBB
Bagikan Berita Ini
0 Response to "Reddit Meme Stocks Including GameStop (GME), AMC Lose $167 Billion - Bloomberg"
Post a Comment