Why are GameStop shareholders holding on to meme stocks?
The result of this major market event was a sudden increase in stock prices for GameStop, which benefited from a short squeeze on various major hedge funds that …
What's happening to GameStop's revenue?
· GameStop Since January 2021, GameStop's stock price has seesawed. As of the close bell Friday, the share price was at $98.50, which is still more than what financial analysts say the company is...
Should you worry about GameStop’s history of poor performance?
· GameStop stock entered 2021 on a strong note after almost tripling in 2020 amid optimism over its restructuring and the pivot towards e-commerce. However, Wall Street funds weren't too convinced...
What does GameStop’s share dilution mean for shareholders?
· May 12, 2022, 1:00 AM PDT The first true meme stock was GameStop, which went wild in early 2021, delivering brutal losses to short sellers, and a fortune to a handful of independent retail...
What happened with GameStop stock 2021?
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 has GameStop stocks gone up?
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 is GameStop stock falling?
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.
Is GameStop going to squeeze?
GameStop's share price also went through a large drop in pricing. A short squeeze, one year after GME gained traction on WallStreetBets, is unlikely to happen. A growing focus on GameStop actual business performance indicates more downside potential.
Is GameStop still worth investing in?
(GME).” It so happens, GameStop's staggering +725% return made it the number one performing stock of 2021. Once the company grew to triple the size of the average holding in the small cap benchmark, it was kicked upstairs to the large cap index.
Did GameStop break the stock market?
The brick-and-mortar video game retailer fell more than 20% to a session low of $46.52 a share on Tuesday, following an 80% drop last week for its worst weekly performance ever. GameStop closed Tuesday's session 16.2% lower at $50.31. At its all-time high on Jan. 28, the stock was going for $483 a share.
GameStop
Since January 2021, GameStop's stock price has seesawed. As of the close bell Friday, the share price was at $98.50, which is still more than what financial analysts say the company is worth.
Robinhood
When the GameStop stock frenzy exploded, trading app Robinhood was at the center of the chaos. It was used so much that the company had to stop trading shares of GameStop in order to meet regulatory requirements.
WallStreetBets
On its FAQ page, subreddit r/WallStreetBets describes itself as a "community for making money and being amused while doing it." Users regularly roast themselves over their big stock market losses and their lack of knowledge.
Meme stocks
Though GameStop was the star of Wall Street for that short, early stretch, the long-term result of this phenomenon was the birth of a concept known as meme stocks.
The GameStop short squeeze was a David versus Goliath battle
Many touted the tussle between Wall Street firms and retail investors as the David versus Goliath battle and a “democratization” of stock markets. Indeed, acting as a cohort, WallStreetBets members almost led to the demise of Melvin Capital.
What happened to GameStop stock in 2021?
GameStop stock entered 2021 on a strong note after almost tripling in 2020 amid optimism over its restructuring and the pivot towards e-commerce. However, Wall Street funds weren't too convinced about the rally and went overboard shorting the stock.
GME stock was an epic short squeeze
WallStreetBets members pounced on the opportunity and went on a buying spree. The “diamond hands” or the “HODLers” wouldn’t simply sell their shares and as a result, the short borrow fees on GameStop exploded. Left with no option, shorts had to cover their positions at a massive loss.
GameStop stock continued to plunge
GameStop stock remained volatile with a downwards bias and by the middle of February, it was trading near $40—a fall of over 90 percent from its peaks. However, the stock soared again in March and traded above $200 that month.
GameStop continues to fall in 2022
Fast forward to 2022, meme stocks aren't as popular as they were in 2021. A lot of retail investors, especially those who made huge losses on meme stocks, have been getting disillusioned with WallStreetBets.
What Happened with GameStop Stock?
The story gripped global markets in January 2021 and left Wall Street reeling. Looking back on the events, it’s difficult to believe what happened. A small group of retail investors on Reddit incited a direct attack on hedge funds using their own tactics.
The GameStop Stock Short Squeeze
What happened with Gamestop Stock? On January 11th, shares of GameStop saw their first real push as the stock gained 12.72% in a single session. A significant move for a stock like GameStop but nothing that really caught the market’s attention.
Other Stocks Affected
The GameStop short squeeze led to the emergence of the meme stock movement and social media trading. Subreddits like r/WallStreetBets began targeting beaten-down stocks with high short positions against them. This led to another short squeeze in June of 2021 for AMC, when it hit an all-time high price of $72.62.
GameStop Stock Now
What happened with GameStop Stock?? The stock has erased most of its gains from the short squeeze and is currently trading at just above $100 per share. Ask any fundamental analyst out there and they’ll tell you how overpriced GameStop still is. After all, before any short squeeze occurred, the stock was trading for below $5.
What is a GameStop?
GameStop is an American brick-and-mortar retailer that specialises in video games, consumer electronics and gaming merchandise. It was widely deemed a company in declining health—indeed, its mere existence as a physical shop was viewed on Wall Street as being decidedly outdated, and its business model was hurtling towards failure.
What happens when you buy an ETF?
When buying into an ETF, an investor effectively gains exposure to all of the company constituents of that ETF, irrespective of their individual prices. And when selling, the investor similarly sells all the constituents at the same time.
Is GameStop a publicly traded company?
GameStop is a publicly traded company, best known for selling video-game discs and cartridges in shopping malls. This is a poor niche for a profit-seeking entity in 2021. It has never been easier to download some new lark onto your gaming console from the comfort of home.
Is Plotkin a low key hedge fund manager?
As far as hedge fund managers go, Plotkin is considered low key. He doesn’t show up at many conferences or hobnob at society balls. Former colleagues and current investors say he’s a nice, quiet guy — not the type to make enemies. The most obvious explanation is that his positions were in some sense knowable.
Is GameStop going bankrupt?
Over the last decade, sales at GameStop locations have slowed in response to the growth of online gaming, but even so, it is unlikely that GameStop will go bankrupt any time soon.
What happens if you don't sell your stock?
By not selling one’s stock, the demand for a particular share of that stock increases, ultimately driving up its price.
What happened to Volkswagen in 2008?
In a single day, the company’s stock value shot up by 93 percent, one of the largest increases in financial history.
What is short selling in Gamestop?
The essence of the GameStop fiasco is that there are stock market players who do something called short selling. Basically, short selling is paying to borrow stocks – usually from a pension or something similar – and then selling those stocks. Later on, when the price of the stock goes even lower, they buy back the stocks they “borrowed” and give them to the pension they borrowed from. The difference in price is what they earn.
Is Wall Street Bets a meme?
When the larger media outlets take a peek at the internet, strange things happen. Wall Street Bets is a subreddit full of its own meme culture and there’s a lot of lingo that gets used there that has leaked into the mainstream. In addition to the memes, the interest in investing has started to reach people who would otherwise probably not consider it.
Wallstreetbets
I am sure that many of you never heard of wallstreetbets (WSB) before this GameStop saga. However, with this event, the wallstreetbets subreddit became quite famous. However, it was already active well before this event. But it has now become much more mainstream than before.
The GameStop plan
Some of the WSB investors studied the market and saw that several stocks were highly shorted by big hedge funds. This means that hedge funds were betting that these stocks would do poorly. For that, the hedge funds were selling shorts.
The first phase
We can look at the stock once the WSB investors started buying them heavily in late January 2021.
The second wave
Interestingly, after 20 days, the stock started going back up. And since that point to the middle of June, the stock has been very volatile. It is currently much higher than it was before the first wave. But it has not been higher than during the first wave.
Summary
After finding out that some stocks were heavily shorted (betting against the stock) by hedge funds, some investors from the WSB subreddit decided to make the price surge to make these hedge funds lose money. In a few days, they managed to increase the price of GameStop stock (and other stocks) very quickly.