GameStop stocks plummet after a Wall Street defining week
GameStop stocks are plummeting again, after a week that will have a significant effect on the trading market. The price for GameStop was $90 even when the market closed on February 2, an 81 percent drop from its peak at $483 last week.
This hasn’t happened since WallStreetBets became famous overnight one week ago, when the subreddit decided it would take the GameStop stock to unimaginable heights. The attempts turned into a meme and millions rushed to give trading a try, enticed by the idea of buying at $4 a share and selling for $400. GameStop’s rapid rise in market value was disastrous for the large investors that had bet against it. Which was exactly WallStreetBets’ plan, as they wanted to “punish the Wall Street big boys”. It worked, and they suffered losses of billions, with investment firm Melvin Capital for example reportedly down $4.5 billion.
Mike Mullaney, director of global markets research at Boston Partners, told the Financial Times: “This was bound to happen — it goes back to the age-old premise that the stock market ultimately at the fringes is driven by greed and fear.”
A class-action lawsuit concerning GameStop stocks was filed and The United States Congress is expected to hold hearings very soon.