Courtesy of Pam Martens
Jim Cramer of CNBC’s Mad Money
There’s an important debate going on about whether the Reddit message board known as WallStreetBets fanned the short squeeze that inflated GameStop from an $18.84 stock on December 31 of last year to a $483 stock intraday on January 28 – a breathtaking run of 2,465 percent in four weeks. Last week GameStop came plunging back to earth, closing the week at $63.77.
Similar short squeezes are causing other targeted stocks to whipsaw in wild trading action. The House Financial Services Committee will hold a hearing on the matter on February 18 and multiple investigations are underway by both federal and state authorities.
At this time one year ago, the Reddit WallStreetBets’ message board had 900,000 users — not a particularly big number for a group that started in 2012. This morning, as a result of all the publicity, the message board is showing 8.7 million users.
BloombergBusinessweek propelled attention to the “Profane, Greedy Traders” by putting their story on the front cover of its March 2, 2020 issue. Reporter Luke Kawa gets credit for noting this in the article:
“Chatrooms where stocks were hyped are seminal artifacts of the 1990s boom and the following bust. They were a setting for bare-fisted digital brawls among all manner of hustlers and promoters, many of whom could move shares on a dime—sometimes just enough so they could get out and leave others holding the bag.”
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