Why did the price of GameStop stocks jump so suddenly?
WallStreetBets learned of the large short positions that major firms held in GameStop, and they rallied followers to push up the stock price through buying shares. As the group continued to push this point, followers bought, bought, and bought some more.
Why is GameStop stock going up?
· April 11, 2021. Recently you may have remembered about Gamestop being all over the news due to a huge rise in its stock. The stock went from 65$ per share all the way up to 347.5$ in under 5 days, it nearly went up by 600%. The cause of this was a short squeeze.
Why did GameStop skyrocket?
· For much of the last few years, GameStop has been seen as a declining brick-and-mortar retailer. For the entire first half of 2020, its stock was trading for less than $10 a …
Should you buy GME stock?
The wider and popular Reddit group wallstreetbets decided to support GameStop and a few other stocks. In their defence, they were fighting a corrupt system run by cash loaded "professional" investors. The relentless demand by the small retailer traders, saw GameStop's valuation rise from $2 million to over $24 million in a couple of days.
The Story Begins With Citron Research
Andrew Left founded Citron Research to provide retail investors with the information necessary to make smart decisions.
How Reddit WallStreetBets Took On Wall Street
The Reddit forum WallStreetBets was integral to the rise of GameStop stock.
Elon Musk Tweets, GameStop Soars
Tesla’s Elon Musk dove into the fray definitively on the side of WallStreetBets.
Melvin Capital Gets A Bailout
Once the dust settled and all of its positions closed, hedge fund Melvin Capital emerged as one of the hardest hit by the GameStop roller coaster.
Robinhood Shuts Down GameStop Trading
Amateur retail investors couldn’t help but think that what happened next proved the “little guys” are at a disadvantage.
Is GameStop a declining company?
For much of the last few years, GameStop has been seen as a declining brick-and-mortar retailer.
Is GameStop a brick and mortar company?
For much of the last few years, GameStop has been seen as a declining brick-and-mortar retailer. For the entire first half of 2020, its stock was trading for less than $10 a share, even as the pandemic led to a surge in the usage and popularity of video games.
Is GameStop essential?
GameStop, in the early days of the pandemic, got a wave of bad press for declaring itself “essential,” and for one store reportedly ordering employees to return to work with their hands wrapped in plastic.
Who is Stephen Silver?
Stephen Silver, a technology writer for the National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today.
What happens when you short a stock?
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 Chrysler go bankrupt?
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 is GameStop up?
GameStop was languishing below $5 a share as recently as September, but it began to rally after Ryan Cohen, the entrepreneur founder of Chewy.com, took a stake, saying the struggling mall retailer was ripe for a turnaround. On Jan. 11, GameStop said it would add three new directors to its board.
Why are BlackBerry, AMC Entertainment and Bed Bath & Beyond up, too?
It’s not just GameStop that’s surging but a whole group of companies, and with most of them there’s a common thread — they’ve been heavily shorted by big Wall Street firms. That makes their shares prone to spike on any good news, as investors who have shorted the stocks are forced to cover their positions by buying back the shares.
Why are the gains so huge?
In addition to the above-mentioned short interest that makes these stocks prone to spike on good news, individual investors in recent weeks have been using options that are further enhancing the effect. Particularly popular on WallStreetBets are “call” options, which enable investors to buy stocks at a predetermined price in the future.
Where is all of this headed?
Asked this week whether to keep buying GameStop stock at such lofty prices, a Reddit user responded, “You’re good until Friday.” That could indicate that the WallStreetBets crowd may have some sort of plan in place.
Investors are playing a dangerous game that could end in crushing losses
Joe honed his investing skills as an analyst for Stock Advisor, Supernova, and Fool One. He battle-tested his investment philosophy and strategies as portfolio manager of Tier 1, a market-crushing Motley Fool real-money portfolio that delivered 24.58% annualized returns during its existence.
What happened
Shares of GameStop ( NYSE:GME) extended their torrid recent gains on Wednesday as a horde of traders rushed to buy the video game company's stock in attempt to crush short-sellers and drive its price to astronomical levels.
So what
GameStop's shares are now up nearly 1,700% so far in 2021 -- and it's still January. An epic short squeeze is believed to be fueling the rally -- one led by an army of individual traders that are using social media sites like Reddit and Twitter to coordinate their strikes against short-sellers.
Now what
While no doubt amusing to Musk, Palihapitiya, and the legion of GameStop bulls who have enjoyed the stock's incredible ascent, the steep rally in its share price might not last much longer.
How much does Michael Burry own GameStop?
As they've watched GameStop’s stock rally, there have been notable people offering their opinions. Michael Burry, best known from the movie “ The Big Short ” as one of the investors who made money from the 2008 financial crisis, had been holding onto GameStop since 2019. Although he has a 2.4 percent stake in GameStop as of Sept 30, 2020, he has stated “there should be legal and regulatory repercussions. This is unnatural, insane, and dangerous”.
What is WallStreetBets?
WallStreetBets (WSB), a community of millennial and Gen Z traders, have helped drive a to-the-moon surge of GameStock’s stock price while halting trading multiple times, crashing Reddit, and even forcing the subreddit to go private. With 3.5 million traders following the subreddit, WSB users are known for purchasing extremely risky products, including leveraged ETFs, financial call and put options, as well as shorting equities .
Who is Stephen Yao?
Stephen Yao is a writer and ex-Deloitte financial engineer with expertise in the life insurance, pension, and capital markets industry. He lives in Toronto, Ontario, and writes about investments, personal finance, and career fulfillment on his blog, GenZ Money
