But unlike many other stocks that have flourished because of the disruptions of the coronavirus pandemic, GameStop’s mind-boggling run has been fueled by a confluence of trading dynamics, pushing the stock price to dizzying heights, largely divorced from the fundamentals of the business.
Full Answer
Why did the price of GameStop stocks jump so suddenly?
Jan 31, 2021 · Why GameStop Stock Exploding and What It Means For The Future By Krystal Cole New York State PUBLISHED 6:12 PM ET Jan. 31, 2021 PUBLISHED 6:12 PM EST Jan. 31, 2021
When will GameStop stock crash?
Mar 23, 2021 · GameStop's stock price is still wildly inflated at just over $180 per share as of Tuesday afternoon. The ailing retailer may take advantage of …
Why did GameStop skyrocket?
Apr 26, 2021 · Most discussions regarding GameStop stock and the short squeeze originated there. The site eventually saw an explosion of traffic, with the subreddit in particular growing over 10 times in size. At this point, concerns were brought up that the “big players” on the market were fighting back and attempting to poison the discourse.
Why is GameStop stock going up?
Jan 28, 2021 · But that doesn't mean the value will hold in the long run or that GameStop is worth its stock value to its shareholders. The explosion in GameStop's stock value is "just a cult phenomenon," Michael...
Why is GameStop stock increasing?
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.Jan 31, 2022
Why did the GameStop stock explode?
In the GameStop saga, at least, the answer is yes. An army of traders on the Reddit forum r/WallStreetBets helped drive a meteoric rise in GameStop's stock price in recent days, forcing halts in trading and causing a major headache for the short sellers betting against it and banking on the stock falling.Jan 29, 2021
Why did GameStop stock go crazy?
“The sudden, sharp surge in GameStop's share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors on forecasts for the new gaming cycle and the involvement of activist RC Ventures,” Telsey analyst Joseph Feldman said in a ...Jan 25, 2021
Why did GameStop stock spike again?
The late January surge was fueled by individual retail investors, many from the Reddit page WallStreetBets, some of whom believed the GameStop was undervalued and others who wanted to squeeze hedge funds that had shorted the stock.Mar 10, 2021
What is GameStop scandal?
Popular investing app Robinhood became the focus of the controversy after it decided to freeze trades for GameStop on Jan. 28. Shares of the video game retailer spiked after traders on Reddit began frantically buying the company's stock. GameStop shares have since came crashing down only to shoot up once again.Mar 17, 2021
Is GameStop still being shorted?
The dollar volume shorted in GME stock at the end of January 2021 was $4.1B and has since decline significantly. Today, about 24% of GameStop's float remains collectively shorted by different investors. Most of them are likely still hedge funds but it remains unclear at what point a short position was initiated.Feb 12, 2022
Who owns GameStop stock?
Top 10 Owners of GameStop CorpStockholderStakeShares ownedThe Vanguard Group, Inc.7.65%5,837,633BlackRock Fund Advisors6.28%4,794,611SSgA Funds Management, Inc.2.17%1,653,929Geode Capital Management LLC1.01%773,8806 more rows
What caused the GameStop short squeeze?
People on the message board site Reddit took note of this, with users on r/WallStreetBets concluding the share price of Gamestop was lower than what was a reasonable value for the stock. They reasoned that this low price was due to shorting by hedge funds and planned what's known as a “short squeeze.”Mar 15, 2021
What did WallStreetBets do to GameStop?
The army of millions of investors from Reddit's WallStreetBets community pushed GameStop shares from US$20 to US$480 during the January “short squeeze”, in which they drove hedge funds like Melvin Capital into heavy losses, after forcing them to liquidate massive bets against the stock.Feb 26, 2021
Why did everyone buy GameStop stock?
WallStreetBets members wound up being right about the squeeze, and GameStop bulls notched incredible gains as short-sellers were forced to buy back the stock at elevated levels in hopes of avoiding massive losses.Mar 19, 2021
How overvalued is GameStop?
GameStop's stock is substantially overvalued at current trading levels based on any reasonable assessment of business value. There have been many successful miracle turnarounds in U.S. corporate history, but to base your investment premise on a hope and a prayer does not seem prudent at this time.Mar 18, 2022
Is GameStop a meme stock?
Meme stocks are back on the menu. Shares of AMC Entertainment Holdings , GameStop , and Bed Bath & Beyond leapt Monday in a resurgence of the frenzied buying that took them through the roof early last year.Mar 28, 2022
The GameStop Incident
Several unrelated posts on Reddit around the end of January 2021 brought up GameStop (GME) as a potentially viable investment opportunity. Despite reports predicting that the value of the GME stock was about to decline, users rallied around the stock and started investing in it.
Growing Media Attention
Media attention towards the situation exploded around the beginning of February. Many outlets were covering the story actively, and discussions about investing in the tech market started to ramp up.
Did Small Investors Really Win?
Over time, the price of GameStop’s stock seems to have stabilized. Many users were predicting a much more significant growth by March-April, with some claims going over $1,000. However, this is starting to seem very unlikely at this point.
Is This Trend Going to Last?
Many experts see this as something that will never happen again. It was the perfect combination of several crucial factors, and the circumstances will likely not line up like that in the future. That said, there is certainly a lot that can be learned from the incident.
The Stock Market Is in a Great Place
Tech stocks are not the only options available for investing, but they certainly have their attractive factors. The market is in a great state right now, and it’s been drawing in lots of new investors. The pandemic has been a major compounding factor for the popularity of trading as a whole.
How much did GameStop stock drop in 2019?
In early 2019, GameStop's stock value fell off a cliff: It dropped from about $16 per share to under $ 4. And it stayed in that range for just shy of two years. Even in 2020, while the video-game business (including GameStop) had huge gains during coronavirus lockdowns, GameStop's stock price remained in the gutter.
Is GameStop a physical disc?
As more people buy video games through digital storefronts, fewer buy games on physical discs. And GameStop is in the business of selling physical discs. Despite a shake-up to the company's C-suite and ...
Why did Left give up on GameStop?
Left has now given up on shorting GameStop, citing harassment by the stock's backers. He also tweeted last week that "too many people" were hacking Citron's Twitter feed, causing him to delay the posting of his video, which was originally planned for Wednesday. Left was not immediately available for further comment.
What is GameStop popular for?
GameStop is also popular with fans of pop culture collectibles, such as Star Wars toys and Funko ( FNKO) figurines, which help attract shoppers who aren't hardcore gamers to visit the brick and mortar shops.
Who is on the board of GameStop?
The company announced earlier this month that Ryan Cohen, founder of online pet supply store Chewy, is now on GameStop's board along with two other former Chewy executives.
