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GameStop shares tumbled Monday as Reddit’s favourite stock struggled to rebound from a massive weekly loss.
The video game retailer’s stock price had jumped nearly 14 per cent in early trading but then dropped as much as 9 per cent on the heels of Friday’s 19 per cent gain. The shares were recently off about 5.9 per cent at $US60.
Monday’s trading pushed GameStop even further from the peak of the Reddit-fuelled rally that drove the stock to staggering heights and squeezed hedge funds that bet against it.
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The Texas-based chain’s shares tumbled 80 per cent last week to close at $US63.77 on Friday. That price put the stock up more than 200 per cent for the year but marked a steep drop from late January, when it traded as high as $US483 a share.
Despite the wild swings, GameStop is still the most talked-about stock on Reddit’s WallStreetBets forum, which was widely credited with pumping it up in a campaign against short-selling hedge funds.
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Users on the foul-mouthed forum recently mentioned GameStop 610 times in a single day, according to data from Quiver Quantitative, which has been tracking WallStreetBets discussions for several months. That’s more than twice the number of mentions for cinema chain AMC Entertainment, which was the second most popular with 291.
WallStreetBets users celebrated GameStop’s pre-market rally on a Monday discussion thread – then affirmed their dedication after the shares fell into the red.
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“Either the stock will go to the moon or it will go to hell. Either way CNN will tell me when it happens,” wrote one commenter. “Everything between now and then is meaningless because I’m not selling.”
“Buy the dip and hold the line, to Valhalla we ride,” another user wrote, adding a pair of rocket emojis.
Reddit has embraced its role in the recent stock market revolution that’s drawn scrutiny from federal regulators and sparked a congressional hearing.
The social media firm ran a five-second Super Bowl ad that paid tribute to the “underdogs” like those responsible for the GameStop saga. Reddit CEO Steve Huffman also praised WallStreetBets in an interview with The Wall Street Journal, saying the forum’s turn in the spotlight “is showing the power of large communities of everyday people”.
“Not just massive institutional and professional investors get to participate in the stock market,” Mr Huffman told the paper.
This article originally appeared on the New York Post and was reproduced with permission
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