Gamestop (GME) stock continued to fall upon the committee meeting.
Citadel, Robinhood, Melvin Capital and Reddit, along with the Reddit trader that goes by the name Roaring Kitty, gave testimony yesterday before the US House Financial Services Committee. They were under scrutiny for the short ladder on the stock and subsequent movement in the markets caused by hundreds of Redditers investing money in the stock to hold it up. This leading to a huge bailout of a Hedge fund who nearly went bust.
Roaring Kitty (my hero!) Keith Gill testified and saught answers to why online brokerages started blocking the purchase of Gamestop shares. Questions I too want answers about — the whole industry in my view is corrupt. Keith said that he bought shares in the company believing they were undervalued (that is actually my view right now). My feeling is that market manipulation and unusual movements by hedge funds are making the stock fall. However, remember that there will be earnings on 1st April, which if are even slightly favourable could help the stock to be in a rise that will continue as we move out of lockdown.
eToro incidentally who I have my holdings with did not stop the trading of Gamestop shares. I have a partnership with them mainly because I think they have a really easy system for new traders. So it wasn’t all brokers. Probably only those who are backed by hedge funds who were involved in the short ladder (I’m speculating here, but it would explain it).
Robinhood face class action lawsuits over GME
Robinhood is now facing over 30 class action lawsuits in respect of the Gamestop share debacle.
Personally, I think it’s a good time to buy more shares in the stock. Why? because it will return to fair price (the price it really should be trading at) eventually and as we come out of lockdown I’m sure that their profits will start increasing and they will start moving to normality. I am quite interested in investing in stocks that have suffered because of Covid 19, but where there will be a good chance of recovery.
I am incredibly sad however for the inexperienced who bought the stock at the top of the market hoping to make a fast buck. If you want to make a fast buck in Share trading. You need to really know what you are doing, how to read charts and understand fundamentals. Most people will make money from shares simply by purchasing stock and holding it — relying on inflation (the cost of living increasing) to push up the value of the shares.
I’m excited to come out of lockdown. I have so many things planned and ideas. Watch this space (and maybe sign up for my newsletter!).
Good luck Gamestop and Kieth, hope it all gets sorted.
