If today is the end, it was still a helluva run by the Reddit crowd at WallStreetBets. The Regular Joes mesmerized the world with their battle against hedgefund vultures who have been circling GameStop for months and sucking the life right out of the brick & mortar brand. Tuesday was a rough day for a stock that caused commotion around the world. $GME finished Tuesday down −135.05 points (60%) to close at 90, and suits are still trying to figure out how to deal with a retail buyer uprising fueled by a message board they don’t understand.
Mark Cuban held an ‘Ask Me Anything’ Tuesday on WallStreetBets and then went on CNBC to discuss the Reddit movement, telling the network he thinks the site will remain a force in invigorating retail traders.
“I always was taught, ‘You get long and you get loud,‘” Cuban told CNBC’s “Squawk Alley.” “You get out there and create more buyers for your stock and the stock price goes up, and that’s exactly what’s happening here, except it’s just WallStreetBets that’s doing the ‘getting loud.’
“I think now that they’ve recognized their power and now that they’ve learned some lessons, we’re going to get more of it, not less of it,” he added. “It’s not going to be a set of circumstances where all these people lost money, they’re going to go home with their tail between their legs and they’re never going to do this again.”
"I am fan of what's going on with WSB and I like the idea of this collective buying. I think it could really have an impact on the markets in the future."@mcuban weighs in on the Reddit-fueled trades.@CNBC @carlquintanilla @dee_bosa @jonfortt $GME pic.twitter.com/oiIvXx6EJy
— Squawk Alley (@SquawkAlley) February 2, 2021
So what now for those who are holding shares that have lost significant value? Though he doesn’t own the stock himself, Cuban offered up the following advice:
“If you can afford to hold the stock, you hold. I dont own it, but thats what i would do,” Cuban said on his AMA.
“Why ? because when RH and the other online brokers open it back up to buyers, then we will see what WSB is really made of. That is when you get to make it all work.
“I have no doubt that there are funds and big players that have shorted this stock again thinking they are smarter than everyone on WSB.”
There are still plenty of threads on WallStreetBets featuring those who refuse to say this fight is over. One poster revealed that his 102-year-old grandmother has diamond hands and refuses to sell the shares she’s held since 1995 when they were purchased for $6.57.
Robinhood continues to loosen purchasing restrictions it had implemented on traders, but it might not be enough to save the company from ruin as lawsuits pile up and the pressure on CEO Vlad Tenev mounts. Tenev failed to be transparent with users about the restrictions until later in the Reddit-Hedgefund war when he announced that the company had used the restrictions because it didn’t have “enough of a cash cushion to hedge against the risky trades,” according to the New York Times.
Time will tell if we’ve seen the end of the $GME battle. Monday, Bloomberg reported short interest had “fallen to about 50% of its total stock available to trade, down from a high of roughly 140% reached earlier this year.”