He added that he respects the market and has “respect for the people on the Wall Street Bets and on Reddit message boards.”
The manager of hedge fund Melvin Capital also on Wednesday admitted to CNBC that the fund was letting go of its GameStop shorts. Sources familiar with Melvin Capital confirmed to ABC News that the hedge fund lost 53% of its total investments in January.
Jan. 28, 2021: Robinhood and other platforms restrict transactions for GME, lawmakers react
The saga took an unexpected turn on Jan. 28 when retail trading platforms including Robinhood and TD Ameritrade abruptly restricted most transactions involving GameStop stock. TD Ameritrade said this was “in the interest of mitigating risk”.
- Jan. 28, 2021: Robinhood and other platforms restrict transactions for GME, lawmakers react
- What is the gamestop controversy
- What is the gamestop stock controversy
- Jan. 19, 2021: Citron Research calls GameStop buyers ‘suckers’
- What is the gamestop scandal
- What is the robinhood gamestop scandal
- What is the robinhood gamestop controversy
- What is the gamestop scandal all about
- GameStop’s Future
- Whats the gamestop controversy
- Jan. 29, 2021: SEC weighs in, trading platforms re-allow most GME transactions
- What is the controversy over gamestop
- What is the gamestop controversy and why is it important
What is the gamestop controversy
The ledger of the company is stable.
“The payment order systemis just really borne out of necessity because there are almost 50 exchanges in the US stock market.” — Yoshi Yokokawa
What this means, however, is that high volatility can interfere with a company being able to clear a payment. And that violates US financial regulations.
The high number of transactions introduced by people rallying around Gamestop did just that — introduced too much volatility to be able to clear all the trades.
Rather than the company wanting to side with supposed buddies in Wall Street — or even just fearing the obvious overvaluation of the stock — it had a duty to ensure that it could make payments to everyone trading on the platform.
Ultimately, the company needed to avoid running afoul of regulation, but it also was helping its users.
What is the gamestop stock controversy
But then this sort of technical phenomenon, which is called a short squeeze, that was really sort the dynamite that was thrown on the kindling.”
Moallemi also said some of the brokerage account screenshots — like the ones Gill posted — also fueled the frenzy.
“In this sort of Wall Street bets culture, people take screenshots of how much money they’ve made or lost to kind of show off,” he said. “And as they sort of advertised that, people started piling into the trade and the momentum built.”
Jan. 19, 2021: Citron Research calls GameStop buyers ‘suckers’
Citron Research, a stock research firm run by famous short-seller Andrew Left, took aim at those buying GameStop stock in a snappy tweet on Jan. 19.
What is the gamestop scandal
GameStop shook up Wall Street and we’re here for it.
Once upon a time, GameStop was a shopping mall cornerstone, offering shelves of newly released video games and a trade-in policy revered by its customers of gaming fanatics. However, over the past few years, with the dawn of digital games and move away from brick-and-mortar stores, the video game retailer has been shuttering countless locations nationwide.
Quite frankly, GameStop hasn’t been making front-page news since the early 2000s…that is, until last week.
The struggling video game outlet has been making headlines this week for a trading tug of war coordinated by a Reddit community on the subreddit, r/wallstreetbets to target greedy hedge fund managers who, up until now, made all the rules. It’s a classic tale of David and Goliath and we can’t help but root for the underdog.
What is the robinhood gamestop scandal
Some are expecting GameStop’s value to fall again once the internet’s war with Wall Street corporations dies down. For now, some of GameStop’s top executives have made a lot of money thanks to their shares of the company.
It doesn’t seem likely that the temporary boost in value will improve the lives of store personnel, though.
The fighting isn’t over. AMC’s value is way up as investors suddenly buy in, expecting short sellers to try to make lost revenue back via AMC.
It’s become more and more convenient for consumers to order games from home and have them delivered or download them straight off of digital marketplaces.
What is the robinhood gamestop controversy
Who Is at Fault in the GameStop Controversy?
The recent GameStop scandal is not easy to understand. Suffice it to say that it involves stock market tricks that traders play to make money off the misfortunes of declining companies. By placing bets on bleak futures, traders can game the system to garner profits.
Such tricks add nothing to market value. They do not represent shareholders or protect their investment. Indeed, these flash shareholders hold (or even rent) shares only long enough to either shave off their profits or minimize their losses from a bad call.
The GameStop Game
These tricks usually do not cause an uproar since they are not illegal.
What is the gamestop scandal all about
GameStop’s rocketing value comes from Wallstreetbets and all the other buyers going all in on GameStop. The massively increased demand for the stock means its value goes up tremendously.
Layman investors are turning huge profits by boosting GameStop’s value, and they’re simultaneously driving short sellers out of the market for engaging in practices that Wallstreetbets and its allies consider predatory. Short sellers are now trying to make their money back by doing the same thing to other companies.
However, the issue has gotten so much public attention that casual investors are prepared to buy up whatever stock possible to block short sellers.
RELATED: The Biggest Video Game News of 2020
It’s hard to say if this means anything for GameStop in the long term.
Whats the gamestop controversy
Ted Cruz, R-Texas, said that he agreed with her — though they didn’t end up agreeing to work together.
Jan. 29, 2021: SEC weighs in, trading platforms re-allow most GME transactions
The U.S. Securities and Exchange Commission on Jan. 29 issued a statement saying it is “closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days.”
The SEC’s statement, however, did not mention any stocks, social media platforms or trading platforms by name, but said the agency “will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws.”
“Market participants should be careful to avoid such activity,” the statement added.
What is the controversy over gamestop
A while back, GameStop had an entire saga with its stock price literally hitting the moon. There was a lot of public support for GameStop then, and with such a premium stock price the company had a chance to turn things around.
Well how have they fared since?
Not great actually. The company still struggles with the same fundamental issues that plagued it for a long time.
That hasn’t stopped them from trying anything that comes under the sun, and just recently the company announced plans to create a new marketplace for nonfungible tokens, aka NFTs.
That venture is going as well as one would expect it to, again, not great! Recently the company came under fire for selling a NFT project that had content ripped off from other creators.
The second part of the driver was the observation that there were a number of hedge funds who basically had a bet that GameStop would go to zero.”
As the shares slowly edged up, these short sellers loomed large.
“The reason why that’s important is if there’s people betting the stock is going to go down, and if they’re wrong and the stock price gets pushed up, then what will happen is eventually they will capitulate and they will give up,” Moallemi said. “And the act of capitulation is basically to buy back their short position, which will even drive the stock higher.”
“So it started out as kind of a little bit of a value investing story,” he added.
What is the gamestop controversy and why is it important
GameStop has been at the center of controversy before. Just last year it drew a tide of criticism for trying to stay open at the start of the COVID-19 pandemic, claiming it was an essential business.
Despite that debacle and everyday criticisms like GameStop’s return policies, it remains one of the most widespread video game shops in the United States. Right now GameStop is making headlines again, but not by its own volition.
GameStop’s stock is surging in value and investors are buying up as much of it as possible. It’s gained hundreds of dollars in value over just a few days.
Naturally, those outside the world of stock exchange can’t help wondering what’s going on here.
It turns out a subreddit is responsible for kicking off a movement to buy up as much of GameStop’s stocks as possible.