The most bizarre story of January seems to be dying out for the time being, as the price of GameStop's stock — which had a peak evaluation of $347 on Jan. 27 following a meteoric rally of 1,600% — is finally plummeting, Bloomberg reports. As of Feb. 2, the GameStop stocks are valued at even $90, which is a 72% drop since Jan. 29, when the stock was at its second-highest peak of $325.
As previously reported, this unprecedented rise was caused by a group of day traders from the WallStreetBets subreddit, who triggered a massive buy-out of shorted GameStop stock, caused the price to rise, and held it by "squeezing" the hedge fund short-sellers, causing them to lose billions in the end. The move was taken up by many members of the gaming community as well, who joined in on the short squeeze in a stance against the Wall Street establishment.
According to Bloomberg, the short squeeze was a $20 billion hit to the so-called "bears" — investor types who bet on a market or stock going down and therefore engaging in frequent short selling — as they have now started to cover their positions.
Still, this might not be the end of the GameStop story. If the stock returns to its sub-$20 state it held in December 2020, another such surge might occur.
Other stocks that were also targeted by the WallStreetBets short squeeze, including AMC, Nokia, and BlackBerry are also plunging, indicating that the short interest is over — at least for now.
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