Shares for Reddit backed meme stock GameStop have tumbled over 13% in pre-market trading following an announcement that GameStop executives would be selling shares to raise profits.
Analysts from Wedbush have downgraded the stock from a “neutral” rating to “underperform” in light of the news coming out of GameStop late Tuesday. Yesterday shares of GameStop fell 6.5%, down to $181.75, in congruence with most of the market yesterday.
GameStop’s meteoric rise has been the result of Reddit community r/wallstreetbets, who initiated a short squeeze on the stock in late January this year. The charge was lead by Keith Gill, a Reddit user who has had taken a bullish stance on the stock and has largely been the spokesperson for the Reddit community.
A congressional hearing was just held yesterday over the use of social media in this unprecedented short squeeze, which US Financial CEO Alan Grujic called “unimaginable without social media in its current form”. Discussions on Tuesday largely focused on demystifying short squeeze practices on Wall Street and having a further understanding of social media influence on the markets.
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