'Stop f---ing selling!!!' WallStreetBets Redditors go ballistic over GameStop's sinking share price
Posted February 4, 2021 3:34 p.m. EST
CNN — Reddit favorite GameStop isn't looking so hot this week and some of the stock's biggest backers are freaking out.
After selling off sharply all week, the stock was down another 36% Thursday.
"Stop f---ing selling GME," is the title of a thread on the WallStreetBets forum, home of the Reddit army that boosted the gaming retailer's stock price in recent weeks.
"We have the advantage. All we have to to is buy and hold shares," wrote one of the users.
Elsewhere on the forum, another said: "To any [hedge fund] plants in the sub trying to break [WallStreetBets]: F--- you. I'm not selling. We're not selling."
The day traders chatting on Reddit who have propped up GameStop with their buying frenzy have inflicted serious pain on the hedge funds holding short positions in the company and betting the stock price would go down.
GameStop has fallen more than 80% so far this week, but year-to-date it is still up more than 200%.
Last week, the short squeeze forced hedge fund Melvin Capital to secure a more than $2 billion bailout to make ends meet, for example.
Professional investors are also keeping tabs on Reddit: Thinknum Alternative Data provides clients with real-time data on stocks being talked up on Reddit to avoid another short squeeze-ageddon.
"Q4 earnings will pop us. The question is, are enough people going to be holding to combat the shorts to force another squeeze," wrote one user.
The company's fourth-quarter earnings aren't due until March 25 — plenty of time for the stock to fall more.
"You have no friends on Wall Street," Mohamed El-Erian, chief economic adviser at Allianz said on CNN Business digital live show Markets Now this week, sharing a lesson he learned early in his trading career.
The next chapter of the GameStop Reddit saga could be all about regulation. Treasury Secretary Janet Yellen is holding a meeting with Wall Street watchdogs looking into the phenomenon. What steps those regulators will be willing or able to take remains to be seen.