GameStop halved in possible end to Reddit craze
Shares of GameStop are getting stomped on Tuesday...
and so is the price of silver...
along with other names favored by the Reddit crowd like AMC.
GameStop shares were cut in half Tuesday to just $114 a share.
On paper, investors have lost an eye-popping $25 billion in market cap as the stock crashes back to earth after hitting an all-time high of $482 last week.
The buying spree led by small investors subsided as the trading frenzy fueled by Reddit message board WallStreetBets that shocked global financial markets appeared to fizzle, at least for now.
Trading app Robinhood also maintained trading restrictions.
For professional investors like Arian Vojdani , an investment strategist at MV Financial, taking advice from an anonymous message board can only take an amateur investor so far.
"If you are a person who is just jumping into a stock because a bunch of other people or buddies of yours say, 'let's all jump in.' That might not be the best view. How many times have you done something your friend told you to do and you regretted it because you didn't do your own research. You should do your research. Think about this. These things have consequences."
The sell-off in GameStop is just as violent as the run-up last week, which caught the world's attention for a putting a squeeze on professional hedge funds, which resulted in billions of dollars of losses.
The fervor seen last week on Reddit's WallStreetBets noticeably died down on Tuesday with posts now ranging from those giving up on the GameStop trade to others calling for investors to stick with the stock.
Even so, younger investors, like 29-year-old Joy Hubbard sees the GameStop, Robinhood, Reddit connection as an evolution in the world of investing geared towards their generation.
"Robinhood provided the opportunity to have your hand in a part of a company, whether it be a share, stake and so on forth, where you necessarily wouldn't have been able to because people live check to check. I enjoyed the fact that I can get a little piece to this, little piece of that, and it's been great."
Silver, which on Monday became another tool in the battle between the amateurs and the professionals, saw a less dramatic fall on Tuesday since it had a less explosive rally. The precious metal tumbled 7 percent after hitting an 8-year high the day before.
And that, according to some analysts, may show that even when small investors band together they won't win all the time.
