Shares in GameStop plunged by 65% in early trading on Wall Street as the trading mania sparked by small investors, that sent its stock surging and cost hedge funds billions of dollars, lost momentum.
The struggling Texas-based video game store chain has been the focal point of a battle by small traders, using forums such as Reddit, to punish Wall Street hedge funds that have bet on certain stocks falling in value. GameStop shares hit a high of $482 last Thursday but slumped to $80 shortly after the market opened. They recovered to $117 by mid-session, down 48% on their opening price.
A year ago, shares in the 37-year-old chain, which plans to close 450 stores this year, were changing hands at $3.25 a share. Read more…..
Chart of the Day
If your head was spinning by the news and terminology surrounding the reports of GameStop’s roller-coaster week on the stock market, you’re not alone. So how and why did shares for the struggling video game retailer skyrocket, and what does it tell us about the economy?