Prices may fluctuate dramatically due to unanticipated events, such as war or pandemic disease. They may also occur due to fresh knowledge or unexpected occurrences known as black swans. As a consequence of the accompanying short-term volatility, investors may experience unexpected price shocks as they try to react. Not all price shocks result in a collapse in the market's value. Following are some of the most significant price swings in stock market history and the winners and losers in each case.
Volkswagen
The carmaker Volkswagen became "the world's most expensive corporation" in a single trading day, completing one of the largest short squeezes in the stock market history. Volkswagen was largely assumed to be a privately held company before this enormous increase in share price.
Short sellers took advantage of the stock's low valuation and the abnormally large number of short positions due to the market's pessimistic opinion of the company's prospects. When Porsche unexpectedly declared on October 28, 2008, that it had purchased a 74.1 percent ownership stake in Volkswagen via derivatives trading, the world took notice. Porsche is a German automobile manufacturer. Porsche's sudden takeover of Volkswagen's activities triggered a panic among institutional and ordinary investors alike, who hurried to liquidate their short positions as soon as possible.
Gateway Industries
Gateway Industries was a website design company that was, by all accounts, tiny. Its lone employee, CEO Jack Howard, was not regarded as very brilliant, even though the company traded for just a cent per share. Finally, a black swan event happened on February 8, 2011, when renowned media mogul Robert F.X Sillerman announced that he would be purchasing Gateway, with the acquisition taking effect on February 11, 2001.
Based purely on Sillerman's reputation, the shares of Gateway Corporation quickly soared more than 20,000 percent, reaching $2.97 per share. Sillerman subsequently merged Gateway Industries with a small number of other companies to form his new media and entertainment company, Function (X), which was eventually, renamed Viggle Inc. in 2012 after being acquired by the company.
Meta-platforms
The largest decline in market value in a single day of trading occurred on February 3, 2022, when Meta Platforms Inc. (FB), doing business like Facebook, had its market value plummet by $232 billion. This beats Apple Inc.'s (AAPL) previous record for the greatest single-day loss, set just 17 months ago.
Meta stock had been rising for five days until a disappointing earnings announcement drove investors into a tailspin. While the company's profits were below analyst estimates, the shocking announcement that Facebook had seen a loss in daily users accompanied the disappointing results. This was the first time the corporation had announced such a development, and the market reacted violently to it.
Amazon
One day after Meta's harrowing loss, another tech behemoth established a new record for the most money made in a single day. During a single day on January 4, 2022, Amazon's (AMZNmarket) capitalization increased by $190 billion, surpassing Apple's previous record of $179 billion set just a week before. An encouraging fourth-quarter financial report, which emphasized Amazon's profits from online advertising and cloud services, was credited with the 14 percent increase in the stock price. Amazon also announced a $20 price increase for Amazon Prime, which means that its users will soon be paying 17 percent more for their subscriptions to the service.
Zynga
When Zynga (ZNGA), a technology firm that makes online games, disclosed that it had significantly failed profit projections in the second quarter of 2012, its stock plunged by more than 40% in after-hours trading the following day. Zynga is closely associated with Meta (previously Facebook), and both firms went public in the same year as Zynga did. Facebook's initial public offering (IPO) was widely seen as a failure, with a $38 IPO price plummeting to a low of $17.55 only three months later. This reflected adversely stock falls on Zynga. The owner of the latter financial results was similarly unsatisfactory in the first quarter.
GameStop
As early as the beginning of the COVID-19 epidemic, no reasonable investor could have guessed that a failing retail company that relied on mall visitors would become the most talked-about stock of 2021. In particular, not Melvin Capital's management, one of many hedge funds that started initiating multi-billion dollar short positions against GameStop (GME) in the months leading up to the 2020 holiday shopping season.
Short squeezes were created as a consequence, which resonated across the whole market. Before some brokerages restricted the purchase of GameStop and other meme stocks in January 2021, GameStop shares skyrocketed from roughly $17 to a high of more than $500 in a single day. After being compelled to terminate their short bets, hedge firms suffered billions of dollars in losses. Melvin Capital went out of business a few months later.
