Let’s see what happens when this guy from a reality show becomes president. Turn a failing business into one that can make people rich, if even only for a week. This is where things get a little complicated and a bit more unclear. Shares in GameStop ticked up on Jan. 11 after it named three people to its board of directors as part of a deal with shareholders who had been agitating for change. That caused some short sellers to abandon their positions, helping to drive the stock up more in the following days. For the most part, investors follow the « buy low, sell high » format when it comes to stocks.
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The vice-president has a shortlist of five possible running mates, according to US media. If your bet was wrong and the price actually rises instead of falling, you’d lose money. If you’re not on Reddit, it’s a social media site – kind https://www.1investing.in/ of like Twitter or Facebook. The sort of thing you’d find between a doughnut shop and a makeup retailer in an American mall. H Acquired Spring Communications, Inc. (« Spring Mobile »), a United States-based Apple wireless retailer.
Everything You Need to Know About the GameStop Story
Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space. There have been endless attempts to make sense of the GameStop episode in print, on TV, and in Hollywood.
Shares drop in US and Asia as AI stocks slide
But brokerages have been making it ever-easier for novices to get into the market and trade. Commissions have dropped to zero, and people can trade on their phones. As each barrier to trading has fallen, consumer advocates cheered the broadening playing field. But they also warned it’s possible to have too much of a good thing.
- “Revenues without profits and prospects of future cash flows are of no value to shareholders.
- « Market participants should be careful to avoid such activity, » the statement added.
- The company’s performance declined during the mid-to-late 2010s due to the shift of video game sales to online shopping and failed investments by GameStop in smartphone retail.
- But the bigger and longer-lasting impact may be on how the market itself operates.
As GameStop’s stock goes up, so does the movie’s temperature. Plotkin (played by Seth Rogen), who’s made a short bet against GameStop (meaning he wants and expects its price to go down), becomes the victim of a short squeeze, which I won’t get into the mechanics of here but means he starts to lose a lot of money. GameStop investors are in awe when their holdings go up (on paper), but Roaring Kitty’s followers proclaim to be “diamond hands,” meaning they don’t sell. At some point, Robinhood limits trading on GameStop, a move that many to this day see as questionable. Eventually, the major players — including Gill — get hauled in front of Congress to try to explain what happened, to the extent there’s any explanation. GameStop, based in Grapevine, Texas, sells video games at more than 5,000 stores, and the pandemic has been keeping customers away.
GameStop Stock Provides No Answers
« The second part of the driver was the observation that there were a number of hedge funds who basically had a bet that GameStop would go to zero. » In early December, GameStop reported that net sales plummeted in the third quarter of its fiscal year 2020, down more than 30% compared to the same time period in 2019. The retailer attributed this drop in sales to a number of reasons, including an « 11% reduction in the store base. »
Most of the individual investors portrayed are shown as having made money. The amount Gill made isn’t clear, though we see he’s bought his brother a new car, an indication he came out ahead. The real-life Gill didn’t participate in the film or in the book it’s based on, Ben Mezrich’s The Antisocial Network.
The Tesla chief executive has some 44 million Twitter followers and was already a popular figure among users of the Reddit forum — especially as Tesla stock soared in recent years despite questions over the company’s actual valuation. « In this sort of Wall Street bets culture, people take screenshots of how much money they’ve made or lost to kind of difference between ceo and director show off, » he said. « And as they sort of advertised that, people started piling into the trade and the momentum built. » « So it started out as kind of a little bit of a value investing story, » he added. « But then this sort of technical phenomenon, which is called a short squeeze, that was really sort the dynamite that was thrown on the kindling. »
This is a massively simplified explanation of something called shorting, or short selling – words you might’ve seen cropping up in your feeds in the last few days. The fact of the matter is there’s still a lot we don’t know about what happened with GameStop and probably never will. It’s also not clear what will come of it; not much has happened on the legislative or regulatory front yet. The momentum to create a more level playing field for smaller investors in the stock market post-GameStop didn’t really go anywhere because there wasn’t an easy place for it to go.
“Part of me is like, if it’s going to the moon, I’m not going to give up my seat, I’ve got my tickets,” she said. On the date of publication, the responsible editor did not have (either directly or indirectly) and positions in the securities mentioned in this article. On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. CEO Ryan Cohen did say a few things in his prepared remarks that kept investors informed without really saying anything about the company’s strategy.
There used to be a time when finding uncovered gems could pay dividends. With the growth of passive and active ETFs, it’s been harder for even small-cap companies to stay under the radar for long. At least, those businesses that have significant growth potential, and are worth paying attention to. In the end, there may be no way to prevent people from pushing a stock too high and potentially burning themselves. Instead, Spatt said it may be better first to properly educate all these novice investors about the risks of bubbles and overzealous trading. But he said it’s difficult to declare it a clear case of market manipulation.