Why is GameStop stock still rising?
On December 30, 2020, the price was valued at 18.84 U.S. dollars per share. The cause of this dramatic increase is a concerted effort via social media to raise the value of the company's stock, intended to negatively affect professional investors planning to 'short sell' GameStop shares.
Why did GameStop stock go up in 2020?
The company's stock price picked up toward the end of 2020 and gained steam after GameStop announced on Jan. 11 that Cohen was joining its board of directors — a sign that maybe the game company could turn things around. It jumped from $19.01 a share at closing time that Monday to $31.40 two days later.
Should I Buy GameStop stock right now?
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.
Why is GameStop stock moving?
Why is GameStop Stock Up? GameStop has the wind at its back thanks to a general market uptrend buoyed by a collective sigh of relief around the Fed's first interest rate hike since 2018.
What happened
Shares of GameStop (NYSE: GME) were running 5.6% higher heading into noontime trading Monday despite the announcement the video game retailer's chief operating officer (COO) had quit just seven months after taking the job.
So what
Companies strive for orderly executive transitions, and though a sudden departure of a chief executive officer or chief financial officer might be more worrisome, the loss of the COO isn't a minor transition.
Now what
GameStop investors shrugged off the news, possibly because at this point it was old news, which is often why companies release potentially disruptive news on Friday evenings. It gives investors time to digest the report, or at best, forget about it by the time Monday rolls around.
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Who owns GameStop?
Ryan Cohen, an activist investor, owns a 13 percent stake in GameStop. Cohen plans to turnaround the video-game retailer into an e-commerce powerhouse from brick-and-retail stores. On June 21, GameStop added its new CEO Matt Furlong to its board. Source: GameStop Facebook.
When will GME stock be added to the Russell 1000?
GME stock remains the hottest and most discussed stock on Reddit groups. On June 25 , GME stock will be added to the Russell 1000 Index of companies. That would require ETFs and mutual funds that track the index to buy GME stock, which would likely drive up the price.
How much did GME sell for Jefferies?
The video game retailer sold 5 million shares for a total of $1.1 billion through Jefferies.
Why are meme stocks at the market?
At-the-market offerings have been used by meme stocks to raise funds because they target retail investors who have been pushing up share prices in the open market. Over the last few weeks, AMC Entertainment, Express, Novavax, and Castor Maritime have also raised funds through at-the-market offerings.
Is GameStop closing?
A hedge fund that bet against GameStop was forced to close after suffering huge los ses as a result of a buying frenzy in the video game retailer’s shares in January. On June 21, Financial Times reported that White Square Capital will shut its main fund and return its capital.
Is GameStop stock up in 2021?
GameStop (GME) is one of the Reddit-fueled meme stocks that has skyrocketed in 2021. Despite a significant drop after June 9, it's still up 964 percent YTD. The stock gained 8 percent in the pre-market trading session on June 22. Why is GME stock rising and how high can it go?
What happened
Shares of GameStop ( GME -4.82% ) were bouncing higher Thursday in noontime trading, rising 3.5% following seven consecutive days of declines, especially following the announcement by Microsoft ( MSFT 0.92% ) that it was acquiring video game giant Activision Blizzard ( ATVI 0.53% ).
So what
The turnaround effort is still in its first stages, though the market has no idea what those plans will actually be as management has played it close to the vest on what the details will be.
NYSE: GME
While there's a certain sense to that strategy, it also leads to wild speculation, though part of it seems to be in the realm of non-fungible tokens, or NFTs. GameStop has been putting out help wanted ads, setting up a website, and calling for creators to participate on what is expected to be a new NFT gaming platform and marketplace.
Now what
Despite some notable spikes over the past year, GameStop shares have largely trended lower, and shares of the meme stock are down by more than half over the last two months alone.
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Why is GameStop so valuable?
Exactly why GameStop’s value — on paper, at least — has rocketed to stratospheric levels has to do with a mix of traditional investing, rampant enthusiasm, stock market mechanics and the belief that anyone with a Robinhood account can meme a fortune into existence.
What happens if GameStop sells off?
If the sell-off is big enough, it could have a cascading effect that leads to broader losses for investors who have never bought or sold a share of GameStop.
What happens when you short a stock?
When the price falls, you buy back the shares and pocket the difference. But shorting a stock is risky — if the price rises, you can lose big. Sometimes you just make a bad bet. But you can also lose if someone tries to push up the price by buying lots of shares, even though the company isn’t doing anything different.
What is it called when you bet against a stock?
Investors who bet against a stock are called “shorts.”. In GameStop’s case, the shorts include at least two big hedge funds. Shorting a stock essentially means borrowing shares from a broker and selling them, with the agreement you’ll return the shares later. When the price falls, you buy back the shares and pocket the difference.
What is an option bet?
These bets involve contracts that give them the option to buy a stock at a certain price in the future. If the price rises, the trader can buy the stock at a bargain and sell it for a profit. (In practice, lots of traders just sell the options contract itself for a profit or loss instead of actually buying the shares, but this description suffices for our purposes.)
What does it mean when a stock increases in demand?
That increases demand, which increases the stock’s price. Which means the brokers have to buy more shares, which means … you get the idea.
Does the bubble affect bettors?
This weird little bubble doesn’t just affect the bettors, though. If big investors on the losing side of these trades have to raise money to cover their losses, it could mean dumping enough shares to hurt the prices of otherwise solid stocks.