GameStop shares tumble as Reddit-rally surge dies down
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GameStop stock jumps for second straight day
GameStop stock tried to rebound from a two-day losing streak on Wednesday as the retailer’s Reddit-fueled rally continued to lose momentum.
The video-game chain’s shares rose 5 percent in premarket trading to $52.85 as of 7:18 a.m. The stock fell about 6 percent Monday and closed down 16 percent Tuesday after dropping below $50 for the first time since Jan. 22.
The last two weeks have been brutal for rookie traders on Reddit’s WallStreetBets forum and other retail investors who pumped up GameStop’s stock to squeeze hedge funds that bet against it.
The Texas-based retailer’s market value has plunged by about $30 billion from the peak it reached on Jan. 28, when its share price climbed as high as $483.
That was also the day that Robinhood joined other brokerages in restricting trading of GameStop and other stocks, a decision that sparked widespread outrage and will be probed at a congressional hearing later this month.
Meanwhile, big investors who had short positions in GameStop have reportedly wound down their bets that the stock would fall. Total short interest in GameStop dropped to about 50 percent of the number of shares available for trading on Friday from more than 130 percent two weeks ago, according to S3 partners data reported by CNBC.
Reactions to GameStop’s rapid tumble were mixed on WallStreetBets, the message board that exploded to 8.8 million members, amid the recent trading frenzy.
Some users shared memes bemoaning the losses, while others made detailed posts arguing that people who bought the stock should keep it.
“Being in GME gang was always about not caring about temporary swings, because in the end, the price always sets a new [all-time high],” a user named eblozavr322 wrote early Wednesday, referring to GameStop’s three-letter ticker symbol.
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