GameStop is one of the last standing physical media stores left, with the fall of Extra vision and Blockbuster it seems like GameStop should be on the way out any day now, well that is what Wall Street would like you to think?
For years now we have all been waiting on the sidelines to see what is going to happen to the once giant of the gaming industry to see how long it will take to close its doors and with the pandemic hitting it seemed like the day was ever closer.
What has changed?
A well-known investor called Ryan Cohen, who is a reputable investor and that is most known for making safe bets while investing in stocks thinks that this Is short sited. Ryan’s thinking behind GameStop being worth more than the stock market gave it credit for was the fact that Sony and Xbox released their next generation of the console with a disc tray and when he became a member of the board inspired confidence in this low-priced stock.
A Reddit community called Wallstreet bets have been keeping an eye on GameStop stock for some time now and they figured out that the stock was massively shorted. IF you do not know what “shorting” means, it’s basically betting that GameStop will go bankrupt. Wall Street bets had got wind that the percentage of shortened stock available was way higher than it should be, and they concluded that it was unamerican to bet against businesses and decided to rally together to save GameStop and let’s face it make bank in the process.
In the older days, the average joes did not have the power or numbers to organise such a mammoth event but with the digital age allowing movement to happen in one place they set out to change wall street forever, the community started to invest heavily in GameStop which forced hedge funders to buy more stock to cover loses and that added to the forward momentum. It then Moved the price from 19 dollars a share to 330 dollars a share. How this will change wall street is yet to be seen but its for sure going to do something.
The question is, is GameStop worth so much money?
Probably not, the crash is going to be hard on this and I do not think it is going to do much for GameStop but set a trend for a while and be a story. The real winners in this are the average joes shifting the money from the hedge funders to their own.
What will be the next stock moved by social media? lets wait and see.