Robinhood, other brokerages face heat for 'hurting the little guy' That comes after the video game retailer surged 400% last week and briefly hit $500, up from $18 just a few weeks ago. The company's market value sits at just over $6 billion after hitting $24 billion last week. The wild swings continued in recent days, with GameStop plummeting 60% Tuesday as the stock shed more than 70% since Friday's close. “Lots of people share really smart trade ideas and share them to 'WallStreetBets' because these people truly want to help other people make money.” “It's the perfect combination of market geniuses and pure degenerate gamblers,” May says of the group. Since then, Citron Research said it will no longer publish short-selling research. So small-pocketed investors used the social media platform to drive up the stock prices for shares like GameStop, AMC and several other stocks. Short-seller Citron Research later posted a YouTube video, highlighting the downside potential for GameStop and it had published short-selling research. But hedge funds, including Citron Capital and Melvin Capital, had shorted the stock. 11 to help speed its turnaround, including a co-founder of online pet-supply retailer Chewy. Redditors were drawn to GameStop stock after the company named three new directors to its board on Jan. Reddit users in the forum took matters into their own hands after hedge funds began unloading the struggling retailer’s stock through a process known as “short selling,” where investors borrow a share and sell it in hopes of buying it back later at a lower price and then pocketing the difference. How r/WallStreetBets burned hedge fundsīoth May and Lin are members of the r/WallStreetBets Reddit community that’s taken Wall Street by storm, spurring a fight in the markets between amateur and hedge fund investors over stocks like GameStop and AMC. "I'm glad to get back into GameStop at some point if there's still momentum," says Lin, who wants to use part of his funds to help pay for his younger sister’s college tuition once she graduates from a high school a year from now. Lin decided to cash out this week in the wake of the losses and walked away with $150,000. His investment hit a high of $277,000 in the middle of last week, then on Thursday, it dropped to $80,000 when trading platforms like Robinhood and Interactive Brokers restricted buying shares on high-flying stocks like GameStop and AMC.
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"Everyone who’s still in at this point is in it to win it," says May, whose account hovered between $30,000 to $40,000 on Tuesday afternoon. GameStop-Robinhood stock revolution: Not a secure retirement planĪlthough GameStop shares lost ground this week following an astonishing rise, May and others are still committed to holding their positions even as the stock shed more than two-thirds of its value in the past two days. 'BBB meets Consumer Reports': Black Dollar Index ranks companies by support of Black AmericaĪ fight is raging in the stock market: Should you worry about your 401(k)? In another part of the country, Roger Lin, a senior at the University of Utah in Salt Lake City, has been waking up before dawn to check in on GameStop and AMC Entertainment before the opening bell after he saw violent swings in his TD Ameritrade account. I’ve never seen more than five digits in my bank account.”
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“This is life-changing,” says May, 19, who is a freshman at Loyola Marymount University in Los Angeles. By last Wednesday, it peaked over $100,000. Last Monday, his $6,000 investment in the stock market, which includes a $5,400 position in the video game retailer that he's built in recent months, broke $10,000. Gavin May can’t help but constantly check his Robinhood app every few minutes following the GameStop mania. Watch Video: GameStop-Robinhood 'Wall Street bets' frenzy explained