LightRocket via Getty Images
A Reddit user who made $48 million in GameStop call options during last week's Reddit-fueled rally claims he lost $19 million when the stock nosedived on Monday and Tuesday.
Keith Gill, 34, who goes by the Reddit username @DeepF---ingValue, says he will hold onto his shares even after the stock lost 80% of its value in 3 days.
Gill started investing $53,000 in GameStop stock last year when he noticed the video game retailer was being heavily shorted by hedge funds. Hedge funds earn millions of dollars by betting that a company's stock price will drop.
Gill earned a quick $48 million during last week's historic rally, but it took less than 2 days for him to lose $19 million.
According to the Wall Street Journal, Gill is an investor who previously worked in marketing for an insurance company.
Reddit users teamed up to send GameStop stock soaring from $36 to $483 a share. But the stock dipped below $80 a share by Tuesday afternoon.
Hedge funds, which lost billions during the GameStop rally, used a tactic called a "short ladder attack" which involves selling GameStop shares to each other at lower prices, thus tricking Wall Street's algorithms into believing retail investors sold their shares at below market prices.
The ladder attack -- which is illegal -- caused the stock's prices to artificially fall. Thousands of Reddit users lost their stock gains and their life savings in 2 days.
Billionaire Mark Cuban participated in an "Ask Me Anything" session on Reddit.com on Tuesday afternoon to calm panicked investors who lost everything.
During the AMA session, Cuban urged investors not to sell their GameStop shares because the low stock price is artificial and only temporary.
Ja Rule weighed in after Robinhood banned trading of GameStop ($GME) stocks on its app on Thursday.
A group of maverick day traders on Reddit.com destroyed at least one Wall Street hedge fund when they purchased GameStop stocks before the hedge funds could buy the stocks to cover their short positions.
Hedge funds bet that a company will fail by "shorting" the company's stock even though they don't own the stock. If the stock price falls, they earn money. But if the stock rises (as was the case with GameStop), the hedge funds must buy the stocks to cover their bets or lose billions of dollars.
Teenagers on Reddit earned millions when the stock surged from $36 on Jan. 19 to $336 on Wednesday.
GameStop stock rallied to $500 before the opening bell on Thursday morning, then plunged more than 60% after Robinhood banned GameStop trades on the app.
Robinhood users complained that the app blocked them from buying more shares. Users could only sell their GameStop shares -- which helped hedge funds buy more shares to cover their short positions.
At least one lawsuit has been filed against Robinhood app for manipulating the stock market to help hedge funds by preventing day traders from buying more GameStop stock.
Rapper Ja Rule urged Robinhood users not to sell their shares of GameStop. He tweeted: "Yo this is a f***ing CRIME what @RobinhoodApp is doing DO NOT SELL!!! HOLD THE LINE... WTF."
Billionaire Mark Cuban also advised traders on Robinhood and Reddit to hold their shares so the hedge funds can't buy the stocks: "Get loud and get long."
Cuban tweeted on Thursday: "So are @robinhoodapp and @IBKR ending trading in #wallstreetbets stocks because they are losing their ass on these trades? Or maybe they dont have the cash to enable the trades at this scale ? Anyone have any insight on their economics? [sic]."
And Congresswoman Alexandria Ocasio-Cortez tweeted: "This is unacceptable.
We now need to know more about @RobinhoodApp's decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
As a member of the Financial Services Cmte, I'd support a hearing if necessary."
LightRocket via Getty Images
By now you've heard about the hedge fund-busting antics on Robinhood and Reddit.com where teenagers became millionaires overnight by investing in GameStop stocks.
The stock price is being fueled by hedge funds desperately covering their short positions in GameStop, the video game retailer.
Hedge funds were short-selling GameStop -- or betting that the company would fail. The lower the stock price fell, the more money the hedge funds made.
But they didn't bet that a group of scrappy day traders on Reddit would rally to save GameStop from certain failure.
When Redditors began purchasing GameStop stocks on Jan. 19, the stock was selling at less than $30 a share. Just one week later the stock price hit a whopping $336 a share -- and the price is going higher.
The catalyst for GameStop to explode higher came on Friday, Jan. 22, when Citron Research announced it would not comment on GameStop any longer due to the actions of "an angry mob" -- the "angry mob" being amateur day traders on Reddit and RobinHood.
Some teenagers who purchased GameStop stock options on the Robinhood stock trading app on Jan. 19 are millionaires today. Others are crying tears of joy because they earned enough money to pay for surgery or to buy a new car.
CNN laughably referred to the "angry mob" on Reddit.com as "Trump supporters."
In an unprecedented move to protect hedge funds on Wednesday, stock broker TD Ameritrade halted trading on GameStop.
SomeMeans via Getty Images
The public is beginning to suspect that the government's rush to bring a Covid-19 vaccine to market is a money grab by big Pharma.
Just a day after announcing Pfizer's Covid-19 vaccine is more than 90% effective in preventing the coronavirus, company CEO Albert Bourla sold 62% of his stock.
The company's claim of 90% efficacy for its vaccine was not independently verified.
The large stock sale sparked allegations of a "pump and dump" insider trading scheme to earn maximum profit by releasing favorable information about a stock before dumping the stock on the open market.
The SEC Form 4 filing obtained by Axios.com shows Bourla sold 132,508 shares at an average price of $41.94 per share, equivalent to $5.6 million.
A Pfizer spokesperson told Axios that the CEO's stock trade was planned in August and the trade was executed on Tuesday.
Other pharmaceutical companies developing vaccines such as Moderna, also made similar stock sales after announcing favorable news about their vaccines.
Doug Mills-Pool/Getty Images[/caption]
President Trump sparked a frenzy on Twitter.com when he proposed a delay in the Nov. 3 election over fears of mail-in voting fraud.
"With Universal Mail-In Voting (not Absentee Voting, which is good), 2020 will be the most INACCURATE & FRAUDULENT Election in history," Trump tweeted on Friday morning. "It will be a great embarrassment to the USA. Delay the Election until people can properly, securely and safely vote???"
The president's tweet triggered a 490-point drop in the stock market amid concerns that the president is attempting to delay the election.
Political analysts say a president can't delay the election unless he gets the approval of Congress.
But Trump's supporters say he is trolling his Twitter followers, as usual.
Democrats expressed fears that Trump is setting himself as a dictator who will refuse to leave the White House if he loses in November.
Shannon Finney/Getty Images
White House coronavirus task force member Dr. Ben Carson says Black people continue to be hardest hit among the most populated cities ahead of the "second wave" of coronavirus infections in the fall.
Carson said the crisis has helped reveal issues of disparity among Black people in the country and that it needs to be approached in a "holistic manner" as the so-called coronavirus "second wave" hits America in the fall.
Timothy A. Clary/AFP via Getty Images
Blacks have been hardest hit due to the lack of affordable healthcare insurance and the tendency to lead unhealthy lifestyles.
"This crisis has really shined the light on this disparity issue," Carson said. "We've known about this obviously for decades and people have talked about it and signed on it. We haven't made a lot of progress."
Tasos Katopodis/Getty Images
In unrelated news, Dr. Carson reportedly sold $1 million in stock after a coronavirus meeting on Capitol Hill in March.
The HUD secretary reportedly sold $1 million in Kellogg stock on March 18, likely to avoid a huge financial loss before a volatile Wall Market plunge in March.
Carson served as Kellogg director from 1997 to 2015. He received the stock as part of his benefits package with Kellogg.
Carson disclosed the sale in a transaction form he filed with the U.S. Office of Government Ethics on April 20. Typically, public officials are supposed to disclose such sales within 30 days.
North Carolina Senator Richard Burr stepped down as chairman of the Senate Intelligence Committee after he allegedly sold stocks to avoid huge financial losses amid the coronavirus outbreak.
Andrew Harnik-Pool/Getty Images
NC Senator Richard Burr has agreed to step down as chairman of the Senate Intelligence Committee after he allegedly sold stocks to avoid huge financial losses amid the coronavirus outbreak.
Burr faces allegations of insider trading, which is punishable by prison time and stiff fines.
Burr, a member of the Republican Party, is the first to step down after a handful of GOP and Democrat lawmakers were accused of selling stocks during the early stages of the coronavirus pandemic in March.
The list of senators under investigation include Georgia Senator Kelly Loeffler (GOP), Calif. Sen. Dianne Feinstein (Democrat), and Oklahoma Senator Jim Inhofe (GOP).
The news comes after Burr was served with a warrant to search his cellphone on Wednesday after previously being served with a warrant to access his iCloud account.
Burr and his wife are accused of selling $1.7 million worth of stocks to avoid huge losses before the country was ordered to shut down.
Burr's brother was also accused of selling stocks on the same day.
After inking the richest contract extension in NFL history, Seattle Seahawks quarterback Russell Wilson surprised his offensive linemen with shares of Amazon stock currently worth $12,000 each. That's about 6 shares of stock for each lineman at today's current price ($1,919 for each share).
Read more »
Aren't you glad you sold your Facebook stock? Facebook stock plummeted over $11 to $174 a share amid news that a British analytics firm linked to former President Trump advisor David Bannon took data from 50 million Facebook users to target individuals online.
Read more »
The Dow Industrials set a new record for the biggest intraday market plunge with a 1,500 point drop on Monday. The stock market lost $4 trillion over 6 days and the Dow wiped out all of its gains for the year.
The so-called FANG tech stocks (Amazon, Google, Netflix and Apple) were among the hardest hit, losing over $90 billion in just a few hours on Monday.
So what triggered the big stock market sell off?
Read more »