Shares of GameStop came under new pressure on Thursday, falling 30% to $ 65, as the video game vendor continued to slide after a social media-driven frenzy raised its shares by nearly 2,000% since early January. .
GameStop actions – which on January 28 went to $ 483 per piece – fell 87% over the past week. The unusual drop has amounted to more than $ 30 billion in the company’s market value.
Shares had skyrocketed especially in late January, after amateur investors on the Reddit discussion forum WallStreetBets piled on the shares, and some traders declared war on Wall Street hedge funds that had bet against the company. . The forum exploded in popularity last week and has grown to eight million members.
CBS MoneyWatch reported on Monday that WallStreetBets moderators had recently detected a “large amount” of bot activity in the stock recommendation content that was posted to their group.
The fall of GameStop followed a sharp cut in short interest on the stock, which measures how many of the company’s shares have been lent to sell. Many had pointed to this high level of short-term interest and so far that hedge funds had been cut and others betting against the video game retailer, as a reason why GameStop shares had skyrocketed.
The fall in GameStop shares could cause significant losses for some individual investors who had followed the stock market’s positive suggestions. WallStreetBets. Keith Gill, the Reddit marketer who claimed to have earned tens of millions of dollars by leading the investment in GameStop – it lost $ 13 million on Tuesday.
Stock prices of other companies that have received reinforcement mentions on WallStreetBets have also fallen sharply. Shares of movie chain AMC Entertainment fell 12 percent Thursday to $ 7.93. These shares, which also fell 40 percent on Tuesday, had reached $ 20 last week. Shares of BlackBerry, which had risen to $ 28 last week, were $ 11.84.
Treasury Secretary Janet Yellin reportedly will meet with financial regulators this week to discuss GameStop’s craze and its impact on investors and the wider markets.
The acting chairman of the U.S. Securities and Exchange Commission, Allison Herren Lee, told NPR on Monday that the stock market regulator is studying different aspects of the sudden rise in GameStop shares, including whether brokers go act appropriately and if there has been any market manipulation.
—The Associated Press contributed to this report.