A Reddit-fueled frenzy saw retail traders send select stocks soaring, disrupting financial markets
AMC Entertainment and GameStop shares dipped Thursday amid high-level meetings to discuss recent trading convulsions and as Reddit users argued furiously on the now-infamous WallStreetBets chatroom about whether to fold or fight.
GameStop shares are down 34%, extending Wednesday’s losses. AMC Entertainment has slipped 19%, and other stocks that were vigorously promoted on WallStreetBets starting last week are mostly lower as the broader market posted gains. A Reddit-fuelled frenzy saw retail traders send select stocks soaring, disrupting financial markets and spreading panic among the talking heads on CNBC.
Scrutiny of order flow and possible funny business in the stock moves started in earnest Thursday as Treasury Secretary Janet Yellen was set to meet with officials from the Securities and Exchange Commission, the Federal Reserve, the New York Fed and the Commodity Futures Trading Commission.
We really need to make sure that our financial markets are functioning properly, and that investors are protected, Yellen said today on Good Morning America.
The price surge squeezed shorts – investors who borrow stock, betting the price will fall. It’s being called a kind of populist revolution and has sparked a handful of movie projects already. But reports that at least one big hedge fund made $700 million in the melee has raised questions about who really won and who lost.
WallStreetBets postings today ranged from resigned to defiant as GameStop and AMC fell.
Of the two stocks that benefitted most from the concerted buying, GameStop and AMC, the former is seen as having weaker fundamentals given shifts in gaming and brick-and-mortal retail. How fast and strongly movie theatres will rebound post-pandemic is a more upbeat discussion.
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