Connect with us

Hi, what are you looking for?

Stocks

GameStop Shares Spiral Downward

After last week’s surge, the company is now stuck below $100.

After an absolutely historic surge last week that shook Wall Street to its core, it seems the incredible GameStop gravy train is finally grinding to a halt. Compared to record highs of nearly $500 a share last week, GameStop shares are currently worth approximately $75 per at time of writing, a drop of over 80% in value.

In the last several days, the stock’s short interest began to tumble, an indicator of just how many shares were borrowed and held on to. The members of the WallStreetBets Subreddit that instigated this event, which currently numbers over 8 million members as a result of the increase in publicity, each individually stand to lose billions of dollars.

“These things can last longer than people expect, but when they unwind they can unwind pretty fast,” said Baird investment strategist Ross Mayfield. “When it’s complete speculation mania and gambling, someone is going to be left holding the bag.”

While the stocks may not be going “to the moon,” as many Redditors have repeated, market analysts and activists have suggested that this event has revealed numerous fatal flaws present in the system.

“They were broken before GameStop, but GameStop and these meme stocks just show how broken they are now. Now, the reason they’re broken is because fundamentals matter less and less every day,” Muddy Water Research founder Carson Block told Yahoo Finance.

“‘What’s the float? What are flows into the stock from passive going to be? What is the gamma embedded in the options that are outstanding?’ This is not asking the question the markets are designed to answer, which is, ‘Which companies are going to take capital and create value?’ And when we’re past that tipping point, it’s kind of fair to ask, ‘What’s the point of these markets?’”

You May Also Like

News

In the past year, Peloton, manufacturers of stationary exercise bicycles and treadmills, has been experiencing some severe financial difficulties. The company went through a...

News

While the ongoing supply chain problems affecting the global economy have had the expected effects, they’ve also had some decidedly unexpected effects. Specifically, many...

News

As gas prices continue to rise and consumer confidence drops, not to mention the ongoing war in Ukraine, the European economy is taking a...

News

As the environmental need for electric vehicles becomes more pressing, and the car-buying public becomes more eager for them, automotive manufacturers are getting ready...

News

This morning, Coinbase CEO Brian Armstrong sent a mass email out to his company informing everyone that, as stock and crypto prices slip and...

News

Last week, a former cybersecurity expert for Twitter, Peiter “Mudge” Zatko, released a whistleblower report on the social platform. In his report, Zatko cited...

News

Zelle is a peer-to-peer payment app and service that can be used by individuals to send and receive money, in a similar vein to...

News

Earlier this week, following the third-term victory of Chinese President Xi Jinping, market shares in Hong Kong experienced a sudden, violent sell-off. Xi’s controversial...