GameStop (GME) action declined rapidly during the week of February 1-5.
On Friday February 5, Robinhood announced that it had lifted the ban on trading.
Meanwhile, social media mobilized communities against Wall Street’s monopoly practices.
The GameStop (GME) share price has fallen to a pre-rise level and hovers around $ 54 in pre-market trading . For their part, traders are again free to open buy and sell orders.
On February 5, the Robinhood trading platform lifted restrictions previously imposed on two shares massively bought by Reddit. The ban followed unprecedented action on the prices of GameStop and AMC Entertainment (AMC).
The end of the game
GameStop has seen a dizzying drop in recent days, with price dropping from $ 350 to around $ 53. The GME chart is particularly parabolic and certainly proves painful for some carriers of large amounts.
The stock was trading above $ 43 before the buying frenzy. Many hedge funds believed the company was on the verge of bankruptcy , before retail traders spiked the price.
In January, the saga began when investment firm Melvin Capital made an aggressive short sale on GME stock. The Reddit operators at r / WallStreetBets saw this as an opportunity.
The latter continued to add significant long positions, putting pressure on Melvin Capital. This resulted in heavy losses for the company. Much of the motivation behind this position was based on market sentiment. It appears that this has rallied social media traders on a quest to defend the “small players” on Wall Street.
GameStop supported by the crypto community
The frenzy of the market was further heightened by cryptocurrency figures, who took part in the trading of GameStop. Tron CEO Justin Sun notably announced his support via Twitter.
Mr. Sun expressed his solidarity by pledging to participate in the trading with million dollar support. He then decided to increase the total to $ 10 million . He was not the only one to support Reddit users. Anthony Pompliano, also known by the nickname “Pomp”, used his podcast to express his displeasure with the activities on Wall Street .
Pomp believes that the events leading up to Melvin Capital’s failure are the start of a paradigm shift. He accused banks and hedge funds of participating in transactions exploiting small players in the financial space.
He pointed to the story of an editor who claimed to have been the victim of market manipulation during the 2008 recession. Pomp believes that Melvin Capital deserved what happened to him.