GameStop news: Latest stock price and Reddit updates

For Indy Premium, here’s Hamish McRae with his lessons to be taken from the GameStop frenzy.

The fund at the centre of the GameStop saga lost more than $7bn last month as a result of the Reddit insurgents, according to The Wall Street Journal.

Melvin Capital closed its position in GameStop at a loss last week as several of its investors including Point 72 and the aforementioned Citadel pumped in $2.75bn to help it end January with $8bn in assets, still down from the $12.5bn with which it began the new year.

The company was founded in 2014 by Gabe Plotkin, who previously worked with Point 72’s founder Steven Cohen.

In  other news, the price of Dogecoin, a joke cryptocurrency, crashed over the weekend after a spike encouraged by Reddit and a tweet from Elon Musk (that man again) duly collapsed.

Dogecoin had climbed 900 percentage points on Friday to a lifetime high of 8.8 cents per coin after the SatoshiStreetBets forum on Reddit called for it to hit $1 but subsequently fell by as much as 75 per cent over the weekend, trading as low as 2.2 cents per coin as interest waned.

Here’s Ben Chu on why Melvin Capital’s humiliation at the hands of day traders is not necessarily something to cheer about.

Vlad Tenev, CEO of trading app Robinhood, has meanwhile accused Elon Musk of “getting into conspiracy theories” after the tech entrepreneur suggested during a livestream that established funds and US financial regulators had conspired to rein-in purchases of GameStop shares to avert a crisis.

Musk interviewed Tenev on the Good Time Clubhouse livestream overnight, with the latter moving to shoot down claims that Citadel Securities may have helped to cause an initial $3bn demand for capital from the National Securities Clearing Corporation (NSCC), which was later reduced to $700m.

“From our perspective, Citadel and other market makers weren’t involved in that,” Tenev said.

“Did something shady go down here,” Musk persisted, leading Tenev to answer: “I wouldn’t impugn shadiness, Elon, or anything like that.”

The Tesla and SpaceX boss insisted Citadel must “have a strong say” in who is employed at the NSCC.

“I don’t have any reason to believe that,” Tenev replied. “You’re getting into conspiracy theories a little bit.”

The Robinhood founder also took the opportunity to pledge “we’ll be able to relax the stringent limits that we put in place on Friday.”

“They came back and said OK the deposit is $700m which we then deposited and paid promptly and everything is fine,” he said of the NSCC demand before adding: “We don’t have infinite capital. There is always going to have to be some limit.”

Here’s Ben Chapman on why the Redditors are bring a class action lawsuit against Robinhood.

The army of Reddit users who last week launched into an extraordinary trading war with established Wall Street hedge funds over shares in failing video game retailer GameStop has switched its focus to silver, sending the price of the precious metal soaring on Monday morning.

Reddit-propelled stock buying drove the price of silver up by as much as seven per cent to $28.99 an ounce, its highest value since mid-August 2020 as amateur investors looked to further exert their influence over the markets.

Retail sites and coin-selling sites, however, have warned their customers that there could be delays in meeting the unprecedented demand for silver bars and coins.

This latest development follows the shock rise in GameStop’s share value by 1,700 per cent in a month as followers of Reddit’s WallStreetBets forum worked together to punish Wall Street short sellers from profiting from the demise of a popular high street brand hard-hit by lockdowns prompted by the coronavirus pandemic.  

Shweta Sharma has the latest.