The stock market capped off what was to be its worst week since October on Friday, with all three major U.S. stock market indices finishing the day about 2% down.
It was a bizarre week from the get-go, defined by a Reddit-fueled buying frenzy in a number of heavily shorted stocks as a narrative of the little guy sticking it to Wall Street played out.
The Dow Jones Industrial Average fell 620 points, or 2%, to finish at 29,982.
Is the WeWork nightmare back? One of the biggest stock market stories of 2019 was the failed initial public offering of WeWork, the Softbank-funded tech-slash-real-estate “unicorn” whose value plunged from $47 billion to around of $10 billion in weeks.
It appears that the company, whose financials were so bad that institutional investors essentially refused to fund the planned 2019 IPO, is now in talks to go public through a special purpose acquisition company, or SPAC, at a potential valuation of $10 billion.
GameStop won’t stop. The Reddit stock that started it all, GameStop (ticker: GME), rose 67.9% on Friday, surging back from a Thursday sell-off as brokers like Robinhood reversed a sudden Thursday policy change and allowed traders to buy GME and other stocks like AMC Entertainment ( AMC) once more.
Robinhood raises $1 billion. Robinhood, like WeWork, is another multibillion-dollar private company that’s been looking to tap public markets. The company has been one of the most anticipated IPOs for several years now, but Thursday’s decision to disallow buying in more than a dozen securities drove populist sentiment against the company, causing many customers to migrate to different services.
Robinhood raised $1 billion from existing investors late Thursday as the company struggled to deal with rising capital requirements from clearing houses, a result of sudden investor demand in a number of hot securities.
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