Wall Street investors made big bets that struggling video game retailer GameStop would fail. They’d been making those bets for a long time too, and they were so sure, GameStop became one of the most heavily bet-against stocks on the market. Over the past few months though, a bunch of Reddit users have been buying up shares, pushing up GameStop‘s value and undermining Wall Street’s big bets. At first, these forum traders bought because they believed the company was better off than the Wall Street doubters thought. Then, as GameStop value soared, Wall Street’s bad bets started to cost investors billions of dollars.
Now the Reddit users want the price to rise even more, as they wage an epic battle against Wall Street.
At one point, the Reddit users from the forum r/WallStreetBets sent the stock up more than 14,300% (you read that right),. They’ve spread their strategy to struggling movie chain AMC, and tech company BlackBerry, too. In their wake, these online market players have upended Wall Street, creating a drama , and as big-time investors have lost billions of dollars.
It’s a crazy story, complete with cameos by Tesla CEO Elon Musk and CNBC financial commentator and former hedge fund manager Jim Cramer. There’s even Michael Burry, one of the subjects of the book and movie , who happens to be a prominent investor in GameStop.
Even Silicon Valley found a way to get in the middle of this mess. It’s wild.
Despite the move beingGameStop’s stock has become the theater for a war between Wall Street and internet traders. Nearly everyone . The questions are when, and who will be on the losing end when it does.
“We’re seeing a phenomenon that I have never seen,” Jim Cramer, a Wall Street commentator on CNBC and a former hedge fund manager, said during a segment as GameStock’s stock began rocketing up. And GameStop could be just the start. “It’s insane.”
It all started last week, when posters on the Reddit stock trading chat community r/WallStreetBets pushed up shares in the struggling game retailer. With much of Wall Street betting against GameStop’s success, r/WallStreetBets investors believed they could force a market rally by where there had been little before.
As a result, GameStop stock jumped more than 822%, from $17.25 per share at the beginning of the year to a high of $159.18 on Monday. Then it dropped by nearly half, only to rise back up to $147.98 on Tuesday. And then Musk tweeted about it to his 43 million followers (using), and the price jumped 40% in after-hours trading. On Wednesday, it closed at $347.51 per share, before dropping again in after-hours trading.
On Thursday, it jumped even higher, to $483 per share, before halving again. Amid all the chaos, the New York Stock Exchangemore than a dozen times before midday Thursday. It ended the normal trading day down 44% to $193.60, only to jump back