The surge has led to one hedge fund facing a bailout
Users of the social network Reddit have sent shockwaves through Wall Street after they quintupled GameStop shares, and made an enormous amount of money in the process, after being mocked on Twitter.
The surge was sparked when users took issue with a tweet from an account called CitronResearch, who called GameStop share buyers “suckers at this poker game” and telling their followers that “we understand short interest better than you”.
Users of the r/WallStreetBets subreddit then proceeded to co-ordinate a mass purchase of GameStop’s shares, sending the US high street game retailer’s share value from $42 to $147 at time of writing, costing GME short sellers $1.6 billion (£1.2bn) in one day.
Following this spend and the events which followed, Citron Research, who describe themselves as an “activist short seller” said in a Twitter video they have “respect” for the market and for the r/WallStreetBets users.
This isn’t the first time Reddit users have caused a stir in the financial world, with the subreddit behind recent spikes in prices of Bed, Bath & Beyond and BlackBerry.
The recent activity involving GameStop shares culminated in the assets of one short seller, a hedge fund named Melvin Capital, losing 30% of its value in January alone. Melvin now faces a $2.8bn bailout.
