GameStop shares came under pressure again on Thursday, declining 30% to around $ 65 as the video game seller continued to slide after a social media-fueled frenzy pushed its stock up nearly 2,000% since early January.
Shares of GameStop – which drove high on Jan. 28 at $ 483 each – are down 87% over the past week. The unusual plunge cut more than $ 30 billion of the company’s market value.
The stock had spiked, especially in late January, after amateur investors piled on Reddit discussion board WallStreetBets, with some traders declaring war on Wall Street hedge funds betting against the company. The forum has skyrocketed in popularity over the past week, reaching 8 million members.
CBS MoneyWatch reported on Monday that WallStreetBets moderators had recently detected a “high amount” of bot activity in the stock recommendation content posted to the group.
The GameStop fall followed a major cut in the short-term interest rate on the stock, which measures how much of the company’s stock has been borrowed to sell. Many had pointed to that previously high short-term interest rate, and the fact that hedge funds and others betting against the video game retailer had been suppressed, as one reason why GameStop’s stock had soared.
The fall in GameStop shares could result in significant losses for some of the individual investors who have seen the positive stock market suggestions WallStreetBets. Keith Gill, the Reddit merchant who claimed to be making tens of millions of dollars, led the push to invest in GameStop – lost $ 13 million on Tuesday.
Share prices of other companies boosted in WallStreetBets have also fallen sharply. Shares of movie theater chain AMC Entertainment fell 12% to $ 7.93 on Thursday. That stock, which also fell 40% on Tuesday, was at $ 20 last week. Shares of BlackBerry, which had risen to $ 28 last week, were at $ 11.84.
Treasury Secretary Janet Yellin will reportedly meet with financial regulators this week to discuss the GameStop mania and its impact on investors and broader markets.
Acting Chairman of the United States Securities and Exchange Commission, Allison Herren Lee, told NPR on Monday that the stock market regulator is investigating various aspects of the sudden surge in GameStop stock, including whether brokers have traded correctly and whether any market manipulation has taken place . .
—The Associated Press contributed to this report.