3 Min Read
LONDON (Reuters) - The Reddit online forum that fired up a global trading frenzy was in a more sober mood on Tuesday, with many retail investors begging others to “buy the dip” as their favourite stocks plunged.
An army of retail punters had sent shares in U.S. videogame chain GameStop and cinema operator AMC soaring in the past two weeks, causing billions of dollars of losses for Wall Street hedge funds which had made costly “short” bets that the share prices would fall.
But with GameStop halving in value on Tuesday, bringing its loss since Thursday’s peak to 75%, and AMC losing another 40%, the earlier euphoria was fizzling out, judging by posts on the popular Reddit forum WallStreetBets.
Buy the dip : Retail traders urge others to keep the faith as GameStop tumbles
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Until now.
That fear has now turned into rage.
Hordes of new retail investors are banding together to take on Wall Street. They are not willing to sit back and watch naked short sellers, funded by big banks, manipulate stocks, harm companies, and fleece shareholders.
The battle that launched this week over GameStop between retail investors and Wall Street-backed naked short sellers is the beginning of a war that could change everything.
It’s a global problem, but it poses the greatest threat to Canadian capital markets, where naked short selling the process of selling shares you don’t own, thereby creating counterfeit or ‘phantom’ shares survives and remains under the regulatory radar because Broker-Dealers do not have to report failing trades until they exceed 10 days.
Short sellers face end of an era as rookies rule Wall Street
Bloomberg
Andrew Left, owner and founder of Citron Research.
The latest assault on Wall Street short sellers has a long tradition, dating back to, well, at least Napoleon. “Treasonous,” he called them for betting against government securities.
They survived that and numerous other attacks over the next several centuries. But the GameStop uprising could mark the end of an era for the public short the long-vilified folks who try to root out corporate wrongdoing, take positions betting a stock will fall and then wage public campaigns.
The biggest casualty came Friday, when Andrew Left’s Citron Research said it will discontinue offering short-selling analysis after 20 years of providing the service. Others are already adopting less-aggressive tactics or evolving into different forms and shapes altogether. Melvin Capital was forced to retreat by dumping its short position on GameStop, Carson Block and others have c
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NEW YORK (Reuters) - Retail investors on the popular online forum WallStreetBets expressed concerns on Monday that bets on silver were undercutting their focus on GameStop Corp and other popular stocks.
FILE PHOTO: Reddit mascots are displayed at the company s headquarters in San Francisco, California April 15, 2014. REUTERS/Robert Galbraith
Posts that argued against buying silver at the expense of GameStop swarmed across the 7.9 million-member discussion board as shares of GameStop fell 30.8% to close at $225.00 on Monday. Spot silver, meanwhile, jumped more than 11% before paring some gains, its largest one-day rise since 2008.
“By buying silver . you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME,” wrote a user with the handle RizzutosNOTAWORD who urged investors to continue to buy GameStop. “It will put you on the sidelines from this righteous and glorious war we are in.”
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