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GameStop shares fell 60% Tuesday in a further reversal of the recent blockbuster gains that grabbed people's attention far beyond Wall Street.
The video game retailer's stock shot up an eye-popping 1,600% in January following a social-media led campaign to boost the price at the expense of big Wall Street funds who were betting on a decline. The dramatic increase, with little connection to investing fundamentals, spurred warnings that things could turn around just as quickly.
GameStop shares fell $135 to $90. The 60% drop was the worst ever for the stock and follows a 31% decline a day earlier. The stock had risen as high as $483 last Thursday, far above the $17 it fetched at the beginning of the year. The sudden swoon this week could dash some investors' hopes of cashing in big.
"These things can last longer than people expect, but when they unwind, they can unwind pretty fast," said Ross Mayfield, investment strategist at Baird. "When it's complete speculation mania and gambling, someone is going to be left holding the bag."