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Gamestop share is crashing

Gamestop. (Photo: Jonathan Weiss / Shutterstock)

For the second day in a row, the Gamestop share posted a double-digit minus on Tuesday. Nevertheless, the share remains well above the price level at the beginning of the year.

The stock of the computer game dealer Gamestop, which has been the subject of a dispute between hedge funds and small investors in the past few days had ignited, has meanwhile lost two thirds of its value on Tuesday. In the afternoon, the share price recovered somewhat and is currently hovering around the $ 120 mark. This is a minus of around 45 percent. Already on Monday the share had gone out of trading with a minus of 30 percent.

Gamestop share: After all-time high comes crash

After all, the Gamestop share is still worth significantly more than at the beginning of 2020, than shares in the distressed company cost around 18 dollars, as Spiegel Online writes. But: As recently as last Wednesday, numerous small investors who also inform themselves in the Reddit forum Wallstreetbets had pushed the share price up to $ 350. That meant an increase of over 1,700 percent compared to the price level at the beginning of the year and brought high losses to hedge funds like Melvin Capital, which had bet on further falling prices.

The current price slump is probably due, on the one hand, to the fact that many small investors have realized their profits and sold shares. On the other hand, the trading restrictions introduced by brokers like Robinhood on Thursday for certain stocks like Gamestop could also have a part in this. For a few days now, users of the broker app have only been able to purchase a certain number of shares – sometimes only one – of certain companies. In addition to Gamestop, this also includes Blackberry, AMC Entertainment and Nokia. In Germany, too, broker apps such as Trade Republic temporarily suspended or restricted trading in the stocks affected by high price fluctuations.

Development around the Gamestop share in Visier

Robinhood users in particular suspect support for the Hedge funds, some of which have suffered billions in losses. Robinhood and other app operators deny this. The offers have been limited because of the high volatility to protect investors. However, the actions of Robinhood and other market participants have meanwhile come into the focus of the Texas Attorney General Ken Faxton. His suspicion: “It stinks of corruption”. The Securities and Exchange Commission is also currently taking a closer look at the developments in the share price of Gamestop, Blackberry and other companies.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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