GameStop 'starting to go bad' as price plunges
InvestSMART’s Evan Lucas says people will end up losing a lot of money in the GameStop saga, as it looks to be going bad with the company’s stock price falling by more than 40 per cent. GameStop, the brick and mortar videogame store, saw its shares skyrocket this week after some users on social media platform Reddit bet against opportunistic traditional hedge funds looking to cash in on the struggling stock, by holding short positions. To counter the short sellers, Reddit banded together to elevate the share price which forced the funds to buy more of the stocks to cover potential losses. GameStop’s shares however fell by 44 per cent overnight due to trading platform Robinhood restricting the trading of the stock. “This is just a new version of thing we’ve seen in the past where leverage is being used and it’s created quite a story,” Mr Lucas told Sky News. “But in the end there is a risk to this that people will end up being burnt and holding positions they don’t, and will lose a lot of money. A lot of money if this goes bad. “It looks like it’s about to start going bad.”
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InvestSMART’s Evan Lucas says people will end up losing a lot of money in the GameStop saga, as it looks to be going bad with the company’s stock price falling by more than 40 per cent. GameStop, the brick and mortar videogame store, saw its shares skyrocket this week after some users on social media platform Reddit bet against opportunistic traditional hedge funds looking to cash in on the struggling stock, by holding short positions. To counter the short sellers, Reddit banded together to elevate the share price which forced the funds to buy more of the stocks to cover potential losses. GameStop’s shares however fell by 44 per cent overnight due to trading platform Robinhood restricting the trading of the stock. “This is just a new version of thing we’ve seen in the past where leverage is being used and it’s created quite a story,” Mr Lucas told Sky News. “But in the end there is a risk to this that people will end up being burnt and holding positions they don’t, and will lose a lot of money. A lot of money if this goes bad. “It looks like it’s about to start going bad.”
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