Everything we know about the GameStop stock insanity
Google deletes thousands of negative Robinhood app reviews
This Redditor made millions off GameStop, sparked market frenzy
Facebook reverses course on banned Robinhood trading group
‘Dr. Frankenstein’ of short selling says his firm will make a major shift
The Reddit-fueled GameStop insanity was far from game over Friday — as the retailer’s stock price resumed its market rollercoaster ride, the mastermind behind the Wall Street attack spoke publicly and one of the czars of short-selling admitted defeat at the hands of the mob.
The struggling brick-and-mortar video-game retailer got a boost on Friday after Robinhood lifted its trading freeze and shares rose by as much as 114 percent to $413.98 at the opening bell.
That price was down to $300 by 1:34 p.m.
Now, the man behind the madness is revealed after rallying an army of average investors in the Reddit forum WallStreetBets under the name “DeepF–kingValue.”
“I didn’t expect this,” Keith Gill, 34, a dad of two from Boston who recently worked for a life insurance company, told the Wall Street Journal.
WallStreetBets, launched in 2012, now boasts 6.2 million users.
The GameStop frenzy — which has pitted amateur investors against deep-pocketed hedge funds — prompted a rare statement from the Securities and Exchange Commission on Friday, which said the agency is working with regulators and US stock exchanges to “to identify and pursue potential wrongdoing.”
“The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities,” acting SEC chair Allison Herren Lee said in a joint statement with the agency’s three other commissioners.
President Biden was mum on the issue, while White House press secretary Jen Psaki deferred questions to the SEC.
One person who did speak out on Friday was Andrew Left, founder and CEO of Citron Research, who said his firm would no longer publish the short-seller reports it had for the last two decades.
Left said he’s been the target of harassment and threats after recommending last week to bet on GameStop’s stock tanking — enraging the investors in WallStreetBets and supercharging the retailer’s stock.
“After 20 years of publishing Citron will no longer publish ‘short reports’,” Citron Research said in a tweet. “We will focus on giving long side multibagger opportunities for individual investors.”
On Wednesday, Left told The Post: “I’m Dr. Frankenstein. I started this whole short research thing years ago but I never thought my monster would turn on me like this.”
In a video this week, Left said Citron covered most of its shorts on Gamestop at a “100 percent” loss but didn’t provide details.
“Have a small manageable position, and I’ll let it go,” he said in the YouTube video.
Melvin Capital also bailed on its GameStop bets — but denied the hit was large enough to force it into bankruptcy.
The self-described “degenerates” on WallStreetBets also got a boost Thursday from Chinese bitcoin entrepreneur Justin Sun, who vowed to buy $1 million in GameStop stock.
Sun, who founded the cryptocurrency platform TRON, then upped the ante a day later, raising his investment to $10 million in support of the Reddit community.
“It’s time to unite & squeeze out those greedy hedge funds!” Sun tweeted. “Wallstreetbets, 4 billion Asian community & 20 mil $TRX community supports u! Let’s do this!”
Meanwhile, the whirlwind short squeeze has united both sides of the aisle — including Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ted Cruz (R-Tx) who both decried Robinhood’s move on Thursday.
Both chambers of Congress on Thursday announced it will hold hearings into the GameStop bonanza.
Massachusetts Sen. Elizabeth Warren fired off a letter to the SEC Friday morning demanding answers from the agency, Forbes reported.
“These wild fluctuations are just the latest indication that many private equity firms, hedge funds and other investors–big and small–are treating the stock market like a casino, giving little consideration to the companies, communities, workers and consumers that may be affected by these risky bets,” Warren wrote.
“The recent chaos reveals a clear distortion in securities markets, with benefits accruing to investors that do not clearly benefit the company’s workers, consumers or the broader economy.”
Retired bond king Bill Gross released a statement Friday, saying the GameStop frenzy was an “apparent budding crisis” in need of “regulatory warnings and mainstream media alerts as to the dangers this week, both to overall markets and individual investors.”
On Friday, Robinhood restricted purchases of cryptocurrencies amid massive rallies in both Bitcoin and Dogecoin.
The price of Bitcoin bounced 20 percent to $37,566.14 thanks to Tesla CEO Elon Musk, who updated his Twitter bio to “#bitcoin.”
Robinhood has raised funds to the tune of more than $1 billion in order to ensure it has enough cash to cover its trades.
Vladimir Tenev, who co-founded the brokerage app for the everyman, defended temporarily halting trading.
“We had to make a very difficult decision to protect our customers and protect our firm,” Tevev said on CNN Thursday night.
“We are in a historic situation where there is a lot of activity and a lot of buying concentrated in a relatively small number of symbols that are going viral on social media.”
Robinhood was hit with a class-action lawsuit Thursday after announcing the trading restrictions on GameStop and other companies like American Airlines, BlackBerry, Nokia and Tootsie Roll.
Massachusetts resident Brendon Nelson accused the app of violating a federal rule that says apps of the like “must make every effort to execute a marketable customer order that it receives promptly and fully.”
“In sum, Robinhood has completely blocked retailer investors from purchasing GME for no legitimate reason, thereby depriving retailer investors from the benefits of Robinhood’s services,” the suit states.
Radio host Rush Limbaugh compared Robinhood to political elites, saying its freeze made it clear that “There are those who are allowed to make a lot of money and those of you who aren’t.”
“If you figure out how to make a lot of money, and if you’re like Donald Trump and you figure out how to get elected, if you figure out how to beat the Deep State, they’re gonna come and they’re gonna wipe you out,” Limbaugh said.
The so-called “Reddit rally” has dealt a blow to hedge funds and Gamestop short sellers, which endured mark-to-market losses of $19.75 billion so far this year, Reuters reported.
Share this article:
Source: Read Full Article