Heavy Losses for Newbie Reddit Traders with GameStock Stock Plunge
As GameStop’s stock plunged 60 percent Tuesday, the online horde that had raced to invest in the “meme stock” scrambled to reckon with the financial bloodshed, wavering between a desire to sell and settle for heavy losses or stick with their online peers who had admonished them to “hold the line.”
In interviews Tuesday with novice traders on r/WallStreetBets, the gleefully reckless Reddit forum that helped fuel the onslaught, several said they were holding out hope that the hyperinflated stock would turn around.
But others expressed deep turmoil, posting screenshots from their online banks and brokerages to the forum that, in some cases, showed hundreds of thousands of dollars vanishing in a matter of hours.
GameStop stock’s climb in recent days captured the international spotlight as a “David vs. Goliath” tale for the digital age: a madcap web of everyday Joes winning billions of dollars from short-selling hedge funds that had bet on the stock’s collapse.
But with the stock having plunged about 80 percent since last week’s peak, the whiplash also highlights how so many investors, lured by the promise of a gold rush, have been quickly dismantled, with help from stock-trading discussion boards and apps that make it easier than ever to invest — and lose — a fortune.
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