Small investors are taking care of their wounds after the collapse of the ‘meme stock’ bubble caught them on the wrong side of the trade, with GameStop’s stock plummeting 72 percent from Monday morning to Tuesday.
GameStop’s shares rose 20 percent on the opening bell on Wednesday when the company announced a new chief technology officer, but reduced gains in volatile trading and remained almost 80 percent below last week’s peak.
For many small traders who have already cut their losses, Wednesday’s small rise came too late. Among them was Dave Portnoy, founder of Barstool Sports and an amateur day trader, who said on Tuesday that he had sold his “meme stock” at a loss of $ 700,000.
Tigran Avetisian, 30, a chemical engineer from Boston, lost $ 10,000 in a $ 40,000 investment in GameStop late on Tuesday, but kept his shares in the hope of a rise, he told the New York Times.
“For a while, it was just free money for everyone,” said Avetisian of GameStop’s impressive recovery, which saw shares gain 1,600% in January, before it collapsed on Monday. “But part of the stock market is knowing when to leave.”
Dave Portnoy (left) sold his ‘meme stock’ at a loss of $ 700,000, while chemical engineer Tigran Avetisian (right) is sitting at a loss of $ 10,000 and waiting for a high
Avetisian said he had an increase of about $ 80,000 in his investment at one point, and still hopes to make a profit.
Others on the Reddit WallStreetBets forum, where the campaign to buy GameStop shares began as a way to punish the hedge funds that had bet against them, also promised to hold the shares despite the punishments.
Keith Gill, the YouTuber known as Roaring Kitty and considered the leader of the movement, posted a screenshot on Tuesday showing losses of $ 13 million in a single day.
Still, Gill remains up $ 7.6 million on his GameStop bet, which he made more than a year ago, when stock prices were at $ 4. On Wednesday morning, the shares were trading at around $ 95.
For those who arrived late to the bubble, the losses were disastrous. A user of the online chat service Discord, who goes by the username ‘Slik’, said PCGamer that he lost $ 850,000 on a risky bet on GameStop.
Silk bought $ 1.1 million in stock options, which are contracts to buy and sell shares, at GameStop on Friday, before this week’s crash destroyed his investment. The options can bring a greater reward for investors than buying shares, but they also present a much greater risk.
Keith Gill, who invested heavily in GameStop when the stock was at $ 4, fell $ 13 million just on Tuesday, but remained up $ 7.6 million on his investment
GameStop shares jumped 20% at the opening on Wednesday, but remain 80% below the peak
Slik, a 52-year-old Nevada resident, told the magazine that the losses were likely to end his family’s event planning business and that he might have to fire 50 employees.
‘I’m going to be honest with you, I haven’t slept in three days, so I didn’t think about it too much,’ he said.
‘I just want my money back, but I know it’s over,’ wrote Slik. “I just didn’t spend enough time to research what I was doing or what the market could do with my account so quickly.”
On the WallStreetBets forum, the small traders who had aggressively applauded the stock were alternately discouraged and defiant on Wednesday.
– I start to think that I can really lose everything. At this point, it’s all or nothing. I probably played a little more than I should have, but I liked that ”, wrote one.
‘THIS IS THE ENDGAME. What else is there to do but wait? saving all this time to sell now would be foolish ‘, posted another.
Reddit users shared images of their losses and vowed not to sell
Many have posted screenshots on brokerage accounts showing their losses, ranging from hundreds to hundreds of thousands of dollars, but have vowed not to sell their shares. A common refrain on the message board read, ‘It’s just a loss if you sell.’
On Wednesday morning, GameStop announced that it had hired Matt Francis for the newly created role of chief technology officer, giving some investors the hope of a digital pivot for the difficult video retail chain.
Matt Francis was hired as GameStop’s new CTO on Wednesday
Francis previously worked as an engineering leader at Amazon Web Services and held senior technology positions at companies like QVC and Zulily.
Meanwhile, US Treasury Secretary Janet Yellen is calling a meeting of key financial regulators this week to discuss the market volatility driven by retail trade on GameStop and other stocks.
Yellen will bring together the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, a Treasury official said on Tuesday.
The meeting took place on the day that Senator Elizabeth Warren wrote to the leaders of Robinhood, the trading app, to ask why they restricted negotiations on GameStop and other actions last week.
US Treasury Secretary Janet Yellen is calling a meeting of key financial regulators this week to discuss market volatility driven by retail trade on GameStop
She asked if the company had been pressured by hedge funds that were losing billions during the frenzy.
“Robinhood has a responsibility to treat its investors honestly and fairly and provide them with access to the market under a set of transparent and consistent rules,” Warren wrote in his letter to Robinhood CEO Vladimir Tenev.
‘It is deeply worrying that the company is not doing this.’
She continued: ‘The public deserves a clear accounting of Robinhood’s relationships with major financial companies and the extent to which these relationships may be undermining their obligations to customers.’
Robinhood denied that he faced any external pressure to limit trading in certain stocks, saying he faced a liquidity crisis and struggled to meet the clearinghouse’s deposit requirements behind the scenes of stock trading amid high volatility.