GameStop losses pile up for small investors after the stock plunged 70% in two days with Barstool Sports founder Dave Portnoy out $700K - but Reddit traders vow to hold on to their shares

 Small investors are nursing their wounds after the collapse of the 'meme stock' bubble caught them on the wrong side of the trade, with high-flying GameStop shares plunging 72 percent from Monday morning to Tuesday night.

GameStop shares rallied 20 percent at the opening bell on Wednesday as the company announced a new chief technology officer, but pared gains in volatile trading and remained nearly 80 percent down from their peak last week.

For many small traders who already cut their losses, Wednesday's small rally came too late. Among them was Dave Portnoy, the founder of Barstool Sports and an amateur day trader, who said on Tuesday that he had sold off his 'meme stocks' at a loss of $700,000.

Tigran Avetisian, 30, a chemical engineer outside Boston, was down $10,000 on a $40,000 investment in GameStop at the end of Tuesday, but held on to his shares hoping for a rally, he told the New York Times.  

'For a little while, it was just free money for everybody,' Avetisian said of GameStop's staggering rally, which saw the stock gain 1,600 percent in January before its collapse on Monday. 'But part of the stock market is knowing when to get out.' 

Dave Portnoy, the founder of Barstool Sports and an amateur day trader, who said on Tuesday that he had sold off his 'meme stocks' at a loss of $700,000
Tigran Avetisian, 30, a chemical engineer outside Boston, was down $10,000 on a $40,000 investment in GameStop at the end of Tuesday, but held on to his shares hoping for a rally

Dave Portnoy (left) sold off his 'meme stocks' at a loss of $700,000 while chemical engineer Tigran Avetisian (right) is sitting on losses of $10,000 and hoping for a rally


Avetisian said he was up some $80,000 on his investment at one point, and still hopes to eke out a gain.

Others on the Reddit forum WallStreetBets, where the campaign to buy up GameStop shares began as a way to punish hedge funds that had bet against them, also vowed to hang on to the stock despite punishing losses.

Keith Gill, the YouTuber known as Roaring Kitty who is viewed as the leader of the movement, on Tuesday posted a screenshot showing single-day losses of $13 million.

Still, Gill remains up $7.6 million overall on his GameStop bet, which he made more than a year ago when share prices were as low as $4. On Wednesday morning, the shares were trading at around $95.

For those who got in to the bubble late, the losses proved ruinous. One user of the online chat service Discord, who goes by the username 'Slik', told PCGamer that he lost $850,000 on a risky bet on GameStop.

Silk bought $1.1 million in stock options, which are contracts to buy and sell stock, in GameStop on Friday, before the crash this week wiped out his investment. Options can bring a bigger payoff to investors than buying stock, but also come with much higher risk.

Keith Gill, who invested heavily in GameStop when the stock was as low as $4, was down $13 million on Tuesday alone, but remained up $7.6 million overall on his investment

Keith Gill, who invested heavily in GameStop when the stock was as low as $4, was down $13 million on Tuesday alone, but remained up $7.6 million overall on his investment

GameStop shares popped 20% at the open on Wednesday but remain down 80% from peak

GameStop shares popped 20% at the open on Wednesday but remain down 80% from peak

Slik, a 52-year-old Nevada resident, told the magazine that the losses would likely wipe out his family's event-planning business, and that he might have to lay off 50 employees.

'I'm going to be honest with you, I have not slept in three days so I haven't really thought about it properly,' he said. 

'I just want my money back but I know it is gone,' Slik wrote. 'I just didn't spend enough time to research what I was doing, or what the market could do to my account so quickly.'

On the WallStreetBets forum, small traders who had aggressively cheered the stock were alternately despondent and defiant on Wednesday. 

'Starting to think I might actually lose everything. At this point, its all or nothing. probably threw a little more than I should have at this, but I've enjoyed it,' wrote one.

'THIS IS ENDGAME. What else is left to do but hold? holding all this time to sell now would be foolish,' another posted. 

Reddit users shared screenshots of their losses and vowed not to sell

Reddit users shared screenshots of their losses and vowed not to sell

Many posted screenshots brokerage accounts showing their losses, ranging from hundreds to hundreds of thousands of dollars, but vowed not to sell their shares. A common refrain on the message board read: 'It's only a loss if you sell.' 

On Wednesday morning, GameStop announced that it had hired Matt Francis to the newly-created role of chief technology officer, giving some investors hope of a digital pivot for the struggling video retail chain.

Matt Francis was hired as GameStop's new CTO on Wednesday

Matt Francis was hired as GameStop's new CTO on Wednesday

Francis previously worked as an engineering leader at Amazon Web Services, and has held senior-level technology roles at companies such as QVC and Zulily.

Meanwhile, U.S. Treasury Secretary Janet Yellen is calling a meeting of top financial regulators this week to discuss market volatility driven by retail trading in GameStop and other stocks.

Yellen will convene the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, a Treasury official said on Tuesday.

The meeting came on the day that Senator Elizabeth Warren wrote to the leaders of Robinhood, the trading app, to ask why they restricted trades in GameStop and other shares last week.

U.S. Treasury Secretary Janet Yellen is calling a meeting of top financial regulators this week to discuss market volatility driven by retail trading in GameStop

U.S. Treasury Secretary Janet Yellen is calling a meeting of top financial regulators this week to discuss market volatility driven by retail trading in GameStop 

White House says it is appropriate for Congress to monitor market
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She asked whether the company had been pressured by hedge funds who were losing billions during the feeding frenzy. 

'Robinhood has a responsibility to treat its investors honestly and fairly, and provide them with access to the market under a transparent and consistent set of rules,' Warren wrote in her letter to Robinhood CEO Vladimir Tenev.

'It is deeply troubling that the company may not be doing so.'

She continued: 'The public deserves a clear accounting of Robinhood's relationships with large financial firms and the extent to which those relationships may be undermining its obligations to its customers.'

Robinhood has denied that it faced any outside pressure to limit the trading of certain stocks, saying that it faced a liquidity crisis and struggled to meet deposit requirements from the clearinghouses behind the scenes of stock trading amid soaring volatility.  

GameStop losses pile up for small investors after the stock plunged 70% in two days with Barstool Sports founder Dave Portnoy out $700K - but Reddit traders vow to hold on to their shares GameStop losses pile up for small investors after the stock plunged 70% in two days with Barstool Sports founder Dave Portnoy out $700K - but Reddit traders vow to hold on to their shares Reviewed by STATION GOSSIP on 09:36 Rating: 5

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