Inflation, interest rates and recession risk have knocked stocks lower again. Alongside stocks, the crypto and non-fungible token (NFT) markets have cratered, too. Yet this latest market meltdown has only had a moderate impact on GameStop (NYSE: GME) stock.
Full Answer
Why did the price of GameStop stocks jump so suddenly?
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.
Why is GameStop losing money?
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Why GameStop is failing?
It is also unclear whether GameStop can count on support from retail traders in case the stock moves closer to multi-month lows as the company failed to reveal any upside catalysts in the quarterly report. The short interest in the company’s shares ...
Why do millennials love GameStop stock?
“The positive side of the recent social media fuelled growth in risky investing is that it is attracting new and younger people to investing and hopefully to more stable and safer financial products,” analysed Cox.
Why are GameStop shares down?
Shares are down about 41% year to date, as the meme trade unwound amid broader market volatility and rising interest rates. The company held a brief conference call with analysts to discuss earnings but didn't take questions, continuing a pattern from the prior four quarters.
Why has GameStop stock jumped?
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.
Did GameStop short squeeze happen?
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.
Should you invest in GameStop?
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.
Shares of the video game retailer continued to be volatile
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What happened
Shares of GameStop ( NYSE:GME) opened 13.5% higher today, but by 10:15 a.m. EST, the stock was in negative territory. There was no news out on the stock today.
So what
After surging higher on an unprecedented short squeeze in January, GameStop shares collapsed last week as the squeeze ran out of momentum, traders took profits, and the stock returned closer to its fundamental value. Last week, the stock plunged 80%.
Now what
While traders hoping to score a quick gain are likely to continue to move in and out of stocks like GameStop and other WallStreetBets stocks for the foreseeable future, it's worth remembering that the underlying business is still facing a number of challenges.
Volatility
GameStop’s last week, last month’s, and last quarter’s current volatility was a negative 2.08%, a negative 1.13%, and a positive 5.18%, respectively.
Stock Price Classification
According to the stochastic oscillator, a useful indicator of overbought and oversold conditions,
What forum was integral to the rise of GameStop stock?
The Reddit forum WallStreetBets was integral to the rise of GameStop stock.
Why did Robinhood decide to stop trading?
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?
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. ...
Will Robinhood lose members?
It is not yet clear how the events of late January will impact Robinhood, both in the short-term and the long-term. Certainly, it has lost the trust of many clients, and the platform is likely to lose members. Robinhood had planned an IPO for 2021, and prior to January, it was expected to be hugely successful.
Did followers buy or sell short positions?
Firms with short positions were forced to buy at the higher prices to close out short positions, which pushed share prices up even further.
Did the news agencies keep up with GameStop?
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.
Does Robinhood sell GameStop shares?
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.
