The GameStop Saga Continues
GameStop, GameStop, GameStop — is it just me or does this word seem like it’s been on the front page of every business and finance website every week for the past three months? Unless you’ve been living under a rock, you’ve likely heard something about GameStop this year.
GameStop started the year with a mega short squeeze as Reddit traders battled hedge funds in a multi-billion-dollar war. Ultimately, many hedge funds that were short shares of GameStop lost the war as GameStop’s stock rose over 2,000% in two weeks during January. Eventually, the crazy momentum propelling the stock to the moon fizzled out, but now the stock is back with a vengeance.
GameStop’s stock has risen over 100% in the past five days as investors reacted positively to news that Ryan Cohen would lead GameStop in its transition to an eCommerce business. Ryan Cohen is the co-founder and former CEO of online pet supplier Chewy, so he has extensive experience leading and growing eCommerce companies.
Investors and Reddit traders loved the Cohen news so much that GameStop’s stock skyrocketed nearly 30% before noon on Wednesday. But then, something crazy happened. GameStop’s stock suddenly plunged 43% in a little over half an hour, shaking investors to their core.
One member on the infamous subreddit WallStreetBets noticed that GameStop had been halted six times in just 31 minutes — the volatility was unprecedented. Frightened investors were eventually calmed down as the stock regained positive price movement, closing up over 7%.
I wonder what the next wild event in the GameStop saga will be.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.