Shah Husain Imam, 03 February 2021
GameStop Corp shares more than halved in value on Tuesday and silver prices retreated as the Reddit-driven trading frenzy that roiled stock and commodity markets appeared to fizzle, at least for now.
The videogame retailer’s shares, whose wild gyrations have made or lost billions of dollars for hedge funds and other investors in recent weeks, closed down 60 per cent at $90. They are now worth less than a fifth of their high of $483 last week, reports Reuters.
Posters on the popular Reddit forum WallStreetBets, which was instrumental in fueling the rally, bemoaned the fall. “Our darkest hour,” read one post here by user name kigfik who said they were still holding the stock. Another user, Cinther, posted that they bought at $390 and “lost so much that I don’t even care anymore” but were still holding.
“The rally is likely over (since) the short positions are pretty well taken care of,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“That’s the game you play when you do this thing. It can work for a while until it stops working and when it stops working, it reverses pretty quickly.”
Short sellers saw paper gains of $3.39 billion during Tuesday’s session, according to S3 Partners. Year-to-date realised and unrealised losses for shorts recently stood at $9.2 billion.
