Dave Portnoy revealed he had sold off his ‘meme stocks’ at a $700,000 loss
The stock trading platform Robinhood has eased restrictions on buying shares of GameStop and other companies caught up in the recent ‘meme stock’ frenzy as the stocks come back down to earth, with the game retailer falling more than 60 percent Tuesday.
The trading limit on GameStop shares was increased to 100 from 20 on Tuesday, while restrictions on AMC, Express, Naked Brand Group and Nokia were also eased, according to an update on Robinhood’s website.
Robinhood also removed all its restrictions on buying shares of BlackBerry, Genius Brands, and headphone maker Koss. As recently as Friday, the app had restricted purchases of stock in 50 different companies as it struggled to meet deposit requirements behind-the-scenes of trading.
The moves came as the Reddit-fueled rally that drove the stocks up in January appeared to fizzle, with GameStop closing down another 60 percent on Tuesday, at $90.
Barstool Sports founder and amateur day trader Dave Portnoy, once a strong proponent of GameStop, revealed that he had sold off his positions in ‘meme stocks’ at a crushing $700,000 loss, but blamed Robinhood CEO Vlad Tenev for his disastrous trades.
Robinhood’s buying limits on certain stocks are seen as of Tuesday afternoon
‘I have officially sold all my meme stocks. I lost 700k ish. Vlad and company stole it from me and should be in jail,’ Portnoy tweeted.
Portnoy had been one of the key online cheerleaders boosting GameStop last week, and railed against Robinhood when the trading platform restricted buying the stock.
Portnoy’s sell-off came against the advice of billionaire CEO Mark Cuban, who urged anyone who owns GameStop stock to hold on to it, predicting it might rally again.
‘If you can afford to hold the stock, you hold. I dont own it, but thats what i would do,’ Cuban wrote in a post on the Reddit forum WallStreetBets (WSB), which had originally advocated buying up GameStop stock to punish hedge funds that bet against it.
‘Why ? because when [Robinhood] 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,’ Cuban continued.
Cuban then called in to CNBC and clarified that he was not advocating buying new shares of GameStop, but rather urging people not to lock in a loss if they could afford to ride it out.
GameStop did rally off session lows after Robinhood eased its buying restrictions on Tuesday, but remained down nearly 50 percent for the day in mid-day trading.
Meanwhile, the ousted founder of the WSB forum, Jaime Rogozinski, has said that the GameStop phenomenon shows the new power of small investors.
GameStop did rally off session lows after Robinhood eased its buying restrictions on Tuesday, but remained down nearly 50 percent for the day in mid-day trading
The ousted founder of the WSB forum, Jaime Rogozinski, has said that the GameStop phenomenon shows the new power of small investors
‘The little guys can’t be ignored anymore,’ Rogozinski told Fox Business on Tuesday of the GameStop frenzy, adding that ‘little guys figured out a strategic way to push back.’
‘They knew that their disadvantage was money and they overcame it,’ he continued.
‘Worldwide I see there’s a lot of sentiments that have been pent-up for a while that are just starting to surface so this is just absolutely fascinating to watch,’ he said.
Reddit removed Rogozinski as a moderator of WSB last year after he feuded with other moderators, who accused him of trying to personally profit from the forum. He strongly denied the allegations in an interview with DailyMail.com last April.
As GameStop shares plunged again on Tuesday, despondent small investors on the WSB forum urged each other to ‘buy the dip’ and hold out for a rally.
Many accused hedge funds that had bet against GameStop of manipulating market prices downward in an attempt to spur a sell-off.
Some said the ‘vibe’ on the forum had changed, making unproven claims that internet bots controlled by hedge funds had infiltrated the group to cause chaos.
WallStreetBets users posted on Tuesday predicting a massive rally in GameStop shares
Others accused hedge funds of manipulating the share price of GME down through schemes
‘Guys. This only works (if) we work together. Buy the dip and hold. For all of us. The movement isn’t over. Balls of steel … We can do this,’ said one post which had garnered more than 8,000 comments, most of them supportive.
Another decried Portnoy for selling his shares, calling him a ‘paper hand b***h’. The term ‘paper hands’ is their slang for a nervous trader who is easily scared into selling, as opposed to ‘diamond hands’
Another wrote: ‘This is looking ROUGH. To be honest I already made my money last week but I am holding the few I have left. But without people out buying the hedgies … this is as good as done.’
GameStop and AMC shares, which small investors traded on Robinhood and other online platforms, are still more than double their January 22 levels when the buying mania erupted.
But many small investors that piled in late last week said on Reddit they were sitting on paper loses of more than 50 percent.
Some wrote on the forum on Tuesday that they would capitalize on the drop in GameStop and AMC to load up on more shares. Yet others pledged to hold, no matter what.
‘It’s not a loss until you sell,’ wrote one post, while another declared: ‘Down 50% on gme. Zero or hero.’