GameStop (GME) is worth over $20 billion, up 1,500% in 2021, thanks to a viral Reddit subthread trying to save GameStop and squeeze Wall Street short sellers.
Shares of GME jumped more than 90% in a single session after the battle between Reddit message board and short sellers continues. In Wednesday premarket trades, GME jumped another 75% before the opening bell.
Tweets by prominent billionaire investors shot up GME another 50% in after-hours trading. "Gamestonk," tweeted Elon Musk with a link to r/wallstreetbets. "Bought some YOLO calls on GME," tweeted Chamath Palihapitiya.
Online forums like WallStreetBets are full of traders who are fueled by beating up the big investors who normally control the market. The scale and pace of the rally in GameStop, BlackBerry (BB) and other stocks have caught Wall Street with their pants down. Some traders refer to the action as a gamma squeeze.
One hedge fund manager, who goes by Mr. Left on Reddit, posted a YouTube video on Wednesday shrugging off the losses for his hedge fund Citron Research, despite a 100% loss on the GME position. “It’s extreme capitalism gone wild,” Mr. Left says. “We’re a nation of gamblers.” Another popular Reddit short seller, Mr. Block, believes this will end badly for the traders, “Frenzied retail speculation always leads to tears,” says Mr. Block, "new investors will be burned."
While not everyone is participating in the social and financial experiment for the same reason, one moderator posted An open letter to CNBC that is doing the rounds on Twitter than explains the sentiments of some traders in the group who are still investing in GME at ridiculous prices, "We don't have billionaires to bail us out when we mess up our portfolio risk," it said, "These funds can manipulate the market via your network... and they have the nerve to turn us into public enemy #1 just because we believe in an underdog company getting a second chance." It continued with some NSFW words, ending with "Seriously, %&$@ these people. I sincerely hope they suffer. We want to see loss porn."
AMC (AMC) shot up 262% from $5 to $16 on Wednesday. #SaveAMC was the #1 trending trending topic in the U.S. on Twitter just a few minutes before the market opened for trading. Of other shorted stocks that have been surging higher, movie-chain operator AMC Entertainment AMC jumped 112%, and software and services firm BlackBerry BB rose 5%.
Shares of GME are currently trading at $293 at time of writing in a very volatile trading session, finding a ceiling around $350.