If you’ve been living under a rock this past week you might not have noticed that everyone is going crazy over the stock market. One particular stock. The video game retail giant GameStop. Their stock market share jumped more than 822%, from $17.25 per share at the beginning of the year to a high of $159.18 on Monday. As I type is is currently $312.01. Not bad if you jumped on early.
So what’s the problem? everyone making money right? Well when COVID hit the states rumors swirled that GameStop would stay open because it’s an essential business because you can buy office supplies such as keyboards, headphones, mics etc. I for one was buying games all throughout the pandemic. Early December GameStop also said they were going to close over 1,000 stores by April 2021.
Wall Street investors made big bets that struggling GameStop would fail. They have been making that bet for a long time and they were so sure that GameStop became one of the most heavily bet-against stocks on the market. Over the past few months though, a bunch of Reddit users from the forum r/WallStreetBets have been buying up shares, pushing up GameStop’s value and undermining Wall Street’s big bets. At first, these forum traders bought because they believed the company was better off than the Wall Street doubters believed. Then, as GameStop value has soared, Wall Street’s bad bets started to cost investors billions of dollars. They’ve spread their strategy to struggling movie chain AMC, and tech company BlackBerry, too.
App-based traders Robinhood, TD Ameritrade and WeBull responded to the rise of share prices by stopping trades of GameStop, AMC and other fast-moving stocks on their services. Which also led to upcoming lawsuits.
