More GameStops possible as small investors flex muscles
Associated PressLOS ANGELES — GameStop and a handful of other stocks whose meteoric rise last month shocked Wall Street began falling back to Earth this week. The GameStop episode is “a wake-up call that is likely to permanently affect the business models of institutional investors,” analysts at Barclays Capital wrote in a research note this week. Citron Research, Melvin Capital and other big hedge funds lost an estimated $5 billion betting that GameStop would fall, according to analytics firm S3 Partners last week. “Retail investors now have tools to band together and move the markets.” Some investors bought GameStop to make money while forcing losses on big Wall Street institutions. Another factor that can make stocks an attractive candidate for a “short squeeze” is how heavily hedge funds are betting that the stock price would decline.