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The company’s stock price has soared this year on rising enthusiasm over GameStop Chairman Ryan Cohen’s reputation and his efforts to orient the company toward e-commerce.
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GameStop Corp. (NYSE:GME) shares, rose in value on Thursday, February 17, with the stock price down by -3.83% to the previous day’s close as strong demand from buyers drove the stock to $123.41. Actively observing the price movement in the last trading ...
Why did the price of GameStop stocks jump so suddenly?
GameStop Corp. (NYSE:GME) shares are trading lower Monday alongside other meme stocks. The stock is continuing to slide lower after the company’s quarterly earnings report last Wednesday showed a 30% revenue boost, but a large widening loss-per-share.
Why did GameStop stock rise?
The stock opened on Jan. 27 at a whopping $354.83 a share. Citron Capital and Melvin Capital, two firms shorting GameStop stock that were referenced heavily in the r/wallstreetbets forum, said on Tuesday that they were closing their positions.
Why is GameStop stock going up?
When did the GameStop stock thing start?
What caused the rise in GameStop stock?
Melvin Capital and Citron were two of the funds caught in the squeeze, forcing them to buy more GameStop stock to cover their losses, which ended up driving the stock price even higher.
How did the stock market affect GameStop?
GameStop's stock price enjoyed gains through most of January 2021, but they exploded late in the month and peaked on Jan. 28, reaching a record high of $483. Shares of GameStop started the year at $19.
Why did GameStop stock go down?
Annual revenue is still down sharply from its peak back in 2017. Since then, GameStop has been struggling to find a path toward consistent sales growth as video-game spending shifts online. It likely didn't help that the industry's expansion slowed in late 2021, according to major retailers like Walmart and Best Buy.
How did GME short squeeze start?
The short squeeze was initially and primarily triggered by users of the subreddit r/wallstreetbets, an Internet forum on the social news website Reddit, although a number of hedge funds also participated.
How the GameStop short squeeze happened?
More than a year ago, the GameStop saga began when traders on Reddit banded together to organize mass buying in certain stocks in a bid to initiate short squeezes in the market. Reddit traders were hugely successful in their attempt to force hedge funds to liquidate their short position in GameStop.
Should I still buy GameStop stock?
Gamestop (GME) stock is likely to decline after the current overheated rally. The stock can still be profitable in the long term if revenue growth stays consistent. But investors should avoid buying GME stock due to the high short-term risk.
How many times did GameStop get halted?
GameStop surged as high as 33%, with trading halted for volatility as many as four times.
Why is GameStop stock tanking?
The consumer electronics industry was pinched by supply chain shortages, the rise of the omicron variant of COVID-19, and declining demand for products in the video game niche compared to a year earlier. Each of those challenges likely affected GameStop over the holiday selling period, too. Image source: Getty Images.
When will GameStop report earnings in 2021?
How much did GME stock end in 2020?
(NYSE: GME) ("GameStop" or the "Company") today announced that it will report third quarter fiscal 2021 earnings results after the market closes on Wednesday, December 8, 2021. The Company will host an investor conference call at 5:00 pm ET on the same day to review its results. This call and all supplemental information can be accessed on GameStop’s investor relations website: https://investor.gamestop.com. The phone number for the investor co
What forum was integral to the rise of GameStop stock?
For example, GME stock ended Dec. 31, 2020, at $18.84 and was trading for $208.64 by mid-day Nov. 18. Source: Northfoto / Shutterstock.com Moreover, at its peak closing price on Jan. 27, GME spiked to $347.51 — a massive 18x gain compared to its Dec. 31 price in less than a month. The SEC report has some interesting point
Why did Robinhood decide to stop trading?
The Reddit forum WallStreetBets was integral to the rise of GameStop stock.
What is the Musk word for stock?
In an attempt to rehabilitate its image, Robinhood attempted to explain that the decision was strictly based on financial distress. The volume of trades exhausted Robinhood’s resources, and trading had to be restricted to stay in compliance with regulatory requirements.
Did hedge funds lose billions on GameStop?
Musk sent out a Tweet to his 44 million followers with just one word, “Gamestonk”, and a link to the WallStreetBets forum on Reddit. “Stonk” is a slang term for “stock” that is popular on forums like WallStreetBets, and his use of the term signified solidarity.
Who offered $2.75 billion to Melvin Capital?
Hedge funds lost billions after betting that GameStop prices would go down, and the market as a whole had its worst week since October 2020. Retail trades were coming in so quickly that commission-free investing platform Robinhood had to limit buys for many of its members, prompting furious responses – and at least a dozen lawsuits. ...
Did the news agencies keep up with GameStop?
Citadel and Point72 Asset Management offered $2.75 billion to Melvin Capital in exchange for non-controlling revenue shares for three years.
Does Robinhood sell GameStop shares?
News agencies couldn’t keep up with the action, and social media was saturated with GameStop-related chatter. Even members of Congress weighed in as the drama unfolded.
Who owns GameStop stock?
Robinhood removed the option for members to purchase more GameStop shares, along with a list of approximately 50 other popular stocks. In some cases, members reported that Robinhood forced the sale of their shares or cancelled outstanding orders.
How much is GameStop stock worth in 2021?
Despite GameStop’s bleak outlook, last year a well-known investor named Ryan Cohen increased his holdings of GameStop stock to more than 10% of the company, with hopes of transforming the mainly physical retailer into more of an online player.
How much did GameStop lose in 2020?
GameStop stock rose from $17.25 on the first trading day of 2021 to $347.51 earlier this week. That’s an increase of about 1,900%.
What hedge fund lost money on GameStop?
The company had a net loss of $18.8 million, or 0.29 per share. As a result of results like that, GameStop stock had been drifting lower for years. It was around $56 a share in late 2013, but had fallen to under $4 by March of 2020. Of course, that was before the massive surge.
How many stores does GameStop have?
In fact, one hedge fund called Melvin Capital lost so much money on its GameStop short positions that it needed a capital infusion of nearly $3 billion to shore up its finances. And GameStop isn’t the only stock that has seen this kind of tug of war between retail investors and hedge funds lately. A few others include:
Is GameStop a small company?
GameStop (NYSE: GME) is primarily a bricks-and-mortar video game retailer with more than 5,000 stores. But this business model is frowned upon by many in the investment community due to both long-term and short-term factors. Long-term, fewer and fewer gamers actually journey out to physical stores to purchase their games.
Did hedge funds bet against GameStop?
In addition, GameStop is by all accounts a small company when you look at its sales and earnings numbers. The retailer of video games is also struggling financially. Sales are falling at a 30% annual rate.
How much did GameStop stock close on Jan 13?
Several major hedge funds looked at GameStop’s books and decided that the company was doomed to fail eventually. So they bet against GameStop stock by shorting it. That means they borrowed the stock and sold it, hoping to buy it back later (and return it to the stock lender) after the stock price fell.
Who are the directors of GameStop?
Some retail traders jumped on GameStop's announcement, and in just a few days the stock closed at $31.40 a share on Jan. 13 -- a spike of more than 50% since the Jan. 11 announcement.
How many members are there in GameStop 2021?
GameStop announced in early January that it was appointing three new directors -- Alan Attal, Ryan Cohen and Jim Grube -- to its board. Cohen is the founder and former chief executive of the e-commerce platform Chewy and one of the largest shareholders in GameStop through the private firm he operates, RC Ventures.
How much is GameStop down in 2020?
On Jan. 27, the group had some 3 million members. By Feb. 3, it had more than 8 million. Here is a timeline of how the GameStop saga unfolded. GameStop store logo on 14th Street at Union Square, Jan. 28, 2021, in New York City.
Who said Gamestop is unacceptable?
In early December, GameStop reported that net sales plummeted in the third quarter of its fiscal year 2020, down more than 30% compared to the same time period in 2019. The retailer attributed this drop in sales to a number of reasons, including an "11% reduction in the store base."
Who is the CEO of SpaceX?
Lawmakers and political figures on both sides of the aisle soon weighed in. Rep. Alexandria Ocasio-Cortez, D-N.Y., called the restrictions on GameStop "unacceptable" in a tweet. Ted Cruz, R-Texas, said that he agreed with her -- though they didn't end up agreeing to work together.
Does the SEC protect stocks?
SpaceX owner and Tesla CEO Elon Musk appears on the red carpet for the Axel Springer award, in Berlin, Germany, Dec. 1, 2020. Just after markets closed on Jan. 26, Elon Musk tweeted the term used heavily in the Reddit page to refer to GME -- "Gamestonk!!". -- and a link to the r/wallstreetbets forum.
How much did Porsche make in the hedge fund squeeze?
The SEC's statement, however, did not mention any stocks, social media platforms or trading platforms by name, but said the agency "will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws."
What is the maximum loss of a stock?
This set off an incredible squeeze in which Porsche made ~$10 billion and hedge funds lost $30 billion. Hedge funds cried foul and Porsche's former CEO Wendelin Wiedeking and ex-CFO Holger Härter were charged with market manipulation, but were ultimately acquitted. Porsche beat hedge funds at their own game and likely prevented their own bankruptcy in the process.
What happens when you short a stock?
When owning, or being long, a stock, your maximum loss is the amount of your investment. As long as you're not using margin, you can own a stock for forever and can't be forced to sell. If you believe a stock is undervalued, you having the luxury of time for the market to appreciate it and the stock to hopefully rise.
What is gamma squeeze?
If you believe the shares of a company will fall, you "borrow" shares via your broker, sell them immediately, and then hope to "return" them by buying them back at a lower price, keeping the difference.
When did short and gamma squeezes happen?
Gamma squeezes are a more recent phenomenon, fueled by the popularity of options, especially with the relative ease at which newer investors have access to them through brokers like Robinhood. The mechanics are different, but themes are similar: forced buying and a feedback loop.
Is Robinhood restricting stock?
Short and Gamma squeezes have happened before; a dramatic example happened in 2008 which briefly made Volkswagen the most valuable company on earth.
When did Chrysler go bankrupt?
It is one thing to restrict margin borrowing on individual risky securities or to not offer options trading on them; it is another issue to restrict purchasing individual securities when a client has sufficient cash. As of Friday, Robinhood was restricting 50 different stocks, including limiting stocks like GM to 1 share. GM has almost no short interest and has traded in a 10% range over the past two weeks. On Sunday, Robinhood significantly relaxed restrictions and only 8 stocks are now restricted. This moving target of what is allowed should erode investors trust in the Robinhood platform. If I had a Robinhood account, I would close it and would recommend other investors do the same.
What happens if Hertz doesn't sell stock?
Many automakers were viewed as bankruptcy risks, and in fact, Chrysler filed bankruptcy in April 2009 and General Motors ( GM) followed a month later.
Why did Facebook change its name to Meta?
If embattled car-rental giant Hertz doesn’t sell enough stock, it might not have enough cash to finance its operations through bankruptcy. If it sells the full allotment, existing shareholders will be diluted. The forces that have inflated tech stocks and other shares could be with us for a while.
Why did GameStop stock fall?
After all, social-media giant Facebook (ticker: FB) changed its name to Meta last month to reflect its ambitions to build the metaverse, where augmented and virtual reality will allow users to interact in online worlds that include games and shopping.
How much stock did GameStop sell?
GameStop, an American chain of brick-and-mortar video game stores, had struggled in recent years due to competition from digital distribution services, as well as the economic effects of the COVID-19 pandemic, which reduced the number of people who shopped in-person. As a result, GameStop's stock price declined, leading many institutional investors to short sell the stock. On January 22, 2021, approximately 140 percent of GameStop's public float had been sold short, meaning some shorted shares had been re-lent and shorted again. Analysts at Goldman Sachs later noted that short interest exceeding 100 percent of a company's public had only occurred 15 times in the prior 10 years.
What happened to GameStop stock in 2021?
As of January 31, executives at BlackBerry and GameStop had sold more than $22 million in stock since January 1. There is no allegation of insider trading among BlackBerry executives, according to CBS News. Three BlackBerry executives sold nearly $1.7 million of the company's stock, with one of the executives, Chief Financial Officer Steve Rai, selling all of his shares in the company excepting unvested employee stock options.
How much did Bitcoin increase in value?
In January 2021, a short squeeze of the stock of the American video game retailer GameStop ( NYSE : GME) and other securities took place , causing major financial consequences for certain hedge funds and large losses for short sellers. Approximately 140 percent of GameStop's public float had been sold short, and the rush to buy shares to cover those positions as the price rose caused it to rise even further. The short squeeze was initially and primarily triggered by users of the subreddit r/wallstreetbets, an Internet forum on the social news website Reddit, although a number of hedge funds also participated. At its height, on January 28, the short squeeze caused the retailer's stock price to reach a pre-market value of over US$ 500 per share, nearly 30 times the $17.25 valuation at the beginning of the month. The price of many other heavily shorted securities and cryptocurrencies also increased.
What is gamma squeeze?
In addition, the price of Bitcoin, the world's largest cryptocurrency, increased 20 percent in value to more than $37,000 after Elon Musk endorsed it in his Twitter bio, partially related to the surge in the GameStop share price by Reddit users. Robinhood then began limiting the trading on Dogecoin.
What is the price of GameStop in 2021?
According to the Financial Times, a "gamma squeeze" also took place in addition to the short squeeze: as traders bet on the rise of stocks by purchasing call options, options sellers hedge their positions by purchasing the underlying stocks (here, GameStop and the related securities), thereby driving their prices even higher.
What happened to Robinhood?
As of January 28, 2021. [update] , the all-time highest intraday stock price for GameStop was $483.00 (nearly 190 times the low of $2.57 reached 9 months earlier in April 2020). In pre-market trading hours the same day, it briefly hit over $500, up from $17.25 at the start of the month.
