January 30, 2023
New Delhi

Why Elon Musk Tweet Gamestonk!!? Effect on the Stock price

Why Elon Musk Tweet Gamestonk!!? Effect on the Stock price

NEW YORK (Bloomberg, Reuters) – Amateur investors carried more in niche stocks on Tuesday (Jan 26), sending professional sellers to cover missing bets, and GameStop/Gamestonk rose for a fourth straight day.

After Mr. Musk tweeted “Gamestonk !!”, GameStop/gamestonk is up 50% in trading expansion, and there’s also a link to Reddit’s Wallstreetbets Stock Trading Discussion Group. Supporters affectionately call Tesla CEO “Daddy Musk”. “Stoics” is a term used to describe stocks that are widely used on social media.

Thanks to the earnings, GameStop’s/Gamestonk market cap has surpassed $ 10 billion (SGD 13.2 billion) after looking at the year at $ 1.2 billion. Currently, it is worth more than 10% of the S&P 500 shares, including American Airlines Group and Under Armor.

Gamestonk off-hours rally resulted in a 93% spike during the rollercoaster trading session on Tuesday, with stocks of video game retailers led by Wallstreetbets traders, many of whom bought choppy call options.

The increase in market share over the past few days has raised questions about potential regulatory strictures from the US Securities and Exchange Commission (SEC).

The Securities and Exchange Commission declined to comment, said Jacob Frenkel, head of securities executive practice at law firm Dickinson Wright and former executive attorney at the SEC.

The Reddit flock of amateur investors has always been supportive of Tesla and other highly volatile stocks, and their influence appears to be increasing.

It is a generational shift in the way people think about investing their money, ”said John Patrickley, ETF Director at VanEck.

“Retailers don’t depend on Wall Street to manage their money, and it can be said that I am now definitely an adversarial relationship between (Wall Street) veterans and rising individual traders. I see that.”

Like GameStop/Gamestonk, BlackBerry is being supported by Wallstreetbets, up 4.9% and 185% this year. Musk’s previous tweets rose nearly 9% before Etsy reversed its earnings.

ALSO READ: Koss Corporation [KOSS] is up 79.64: why it matters

The recent rally (GameStop/Gamestonk increased by more than 700% from $ 19 since Jan 12th to $ 147.98) has sparked concerns about the stock bubble betting on hedge funds and other speculators.

GameStop shares were suspended nine times on Monday and five times on Tuesday due to volatility.

For some stock market experts, the recent moves seem to be a symbol of the stock market that can be overestimated at the end of the year, as it was dominated by a flood of financial and financial incentives to alleviate the Coronavirus crisis.

The S&P 500 is up more than 70% from its lowest level in March due to the coronavirus pandemic.

“This is not the environment in which informed investors trade to set prices,” said Mike O’Rourke, chief market strategist at Jones Trading.

Venture capital investor Chamat Palihapitiya said in a tweet that he bought a $ 115 buy option on GameStop Tuesday morning after interacting with Reddit founder Alexis Ohanian.

According to analytics firm S3 Partners, GameStop’s short sellers fell by $ 5 billion on a market basis, and net funding in 2021 included a loss of $ 876 million at the beginning of Tuesday.

Ihor Dusaniwsky, Managing Director of Predictive Analytics at S3, said:

Another popular Reddit investor stock, Virgin Galactic Holdings, is up 17% and so far up 77%.

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