The shares in GameStop spouted on Wednesday in what could make a return to frenzied trading that rocked markets last month. This paved way for Trading in the US games firm was halted twice after shares more than doubled suddenly on Wednesday afternoon. GameStop stock hiked by 104% until trading was halted for a second time this has happened as a miracle moments before markets closed. The rapid rise came as Reddit which is the online home of activist investors that led the GameStop movement in January went down temporarily. It is also quite surprising that the stock gained 90% in after-hours trading. This whole scenario happened just after the day the firm announced its chief financial officer Jim Bell would resign next month to help “accelerate GameStop’s transformation.” Some of the investors have stated publicly and posted on social media site Reddit about not selling their shares in GameStop during last month’s volatile trading because of what they see as its long-term credibility.
Temporary Reddit Crash Once Again Led To GameStop Gush!
It was a week ago reported in media about a man who became a key player in frenzied trading of GameStop shares last month has been hit with a class-action lawsuit. Keith Gill, known as ‘Roaring Kitty,’ on YouTube, allegedly duped retail investors into buying inflated stocks while hiding his sophisticated financial background. Mr. Gill has downplayed his impact and rebutted claims he violated any laws. Separately, he will testify on Thursday to Congress about the “Reddit rally”. Mr. Gill said in the prepared testimony “The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,”
“I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel.” He added.
Very recently the public also got to witness the news that the chief executive of Robinhood, the trading platform that restricted the purchases of GameStop shares to investors during the trading frenzy, is also expected to testify. The GameStop saga was hailed as a victory of the little guys against big Wall Street hedge funds that were betting against video games retailer GameStop and other struggling businesses.
It was on Wednesday Reddit was found down for many users. The company did not say what caused the outburst, but it was said that it had identified the issue that fixed it and that the “system is beginning to recover.”
Experts opinioned that it is the latest twist in a war that has pitted amateur investors against the wall street big shots.
Major hedge funds had bet billions of dollars that GameStop’s shares would fall. But they have faced major losses after amateurs, swapping tips on social media sites like Reddit, drove up the share price by more than 700% in one week. The retail trading frenzy drew concern from regulators and has even led to a Congressional hearing in the US.
The GameStop saga was hailed as a victory of the little guys against big Wall Street hedge funds that were betting against video games retailer GameStop and other struggling businesses.
But it is quite unclear what role hedge funds had in the rally, as some exclusive reports are coming which states that one has made millions from the GameStop share rally that was inspired by Reddit users.