GameStop is one of those stores that has a story about almost every gamer. Many of today’s adults spent their childhood in one of the shops, lining up for launch and buying or selling consoles and video games. Now some of those people have made a fortuneAnd encourage your friends on Reddit . GameStop’s stock has increased more than ever, and all because activity among social media investors has started pushing it up. Wall Street made a heavy bet that the price would fall, causing the stock to surge wildly. In the midst of all this, Jaime Rogozinski, the outspoken founder of the Reddit community, told The Wall Street Journal that it is like “a train wreck that happens in real time”.
On Thursday alone, GameSpot’s stock hit an all-time high of $ 492.02 per share, only to drop more than half a minute later. On Friday afternoon, it jumped to $ 324.
GameStop hasn’t changed itself fundamentally much in the past month, but its stock has risen by 1,800% – it’s not a typo – since the beginning of the year. This dynamic-led Wall Street investors bet against the future of the company to lose billions of dollars, and enthusiasm is.
During the past week, the financial world watched in shock as Gametop stock rose to unimaginable levels. Even Elon Musk tweeted about it, pointing to his 43 million followers on a link to the Reddit community investing in GameStop, called R / Volkrabits.
At the close of regular trading on Wednesday afternoon, the stock stood at $ 347.51 per share, above historical lows of around $ 3.30 per share in the summer of 2019. And in the hours that followed, it plummeted over 37%, only to rise again. Thursday saw an even more dramatic move, with the stock bouncing back to $ 492.02 before dropping to $ 602 at 197.44. Then, after hours of trading, it rose to $ 311.99.
Meanwhile, the stock market trading appFor part of the day, while other companies implemented rules to limit certain trades as well.
“We’re seeing an event I’ve never seen,” said Jim Cramer, a Wall Street commentator and former hedge fund manager on CNBC, on Monday. And GameStop may be just the beginning. “this is insane.”
This may sound like a strange story about Wall Street investors that have been overrun by excited social media users. For some, it’s fun to watch those investors get taken to the cleaners by a swarm of people posting rocket emojis, saying that Gametop’s shares will go “over the moon”.
But for some on Wall Street, this is the latest sign of how social media can enhance everyday life. Twitter has changed the world of news and politics. YouTube and Instagram have transformed the fashion, beauty and entertainment industries. Now Reddit is taking over Wall Street.
These worlds are overlapping as well. Fans of Korean pop groups, known as K-pop, bring a flood of tweets about their favorite stars to overwhelm the racist hashtag on Twitter. And Ticktakers banded together in attempts to confuse President Donald Trump’s reunion campaign.
The now-emerging Reddit community is talking about taking on other companies that Wall Street is betting on broadly. The Reddit crowd is attempting to outdo the already popular handset maker BlackBerry, which is now primarily focused on selling commercial software. And Redditors are also targeting struggling film series AMC, waving its stock to more than $ 8 per share at around $ 2 per hour of trading. It closed at $ 19.90 per share before dropping to $ 12.75 by Wednesday afternoon. On Thursday, it fell even further to $ 8.63 per share.
The actions of the Reddit community have had such an impact that TD Ameritrade took an extraordinary step earlier this weekOn Game Stop and AMC stock, “out of an abundance of caution amid unprecedented market conditions.” Nasdaq also warned that it would stop trading on stocks that it thinks are being manipulated by social media.
Meanwhile, WallStreetBets, for the Reddit community at the center of the play, is breaking records. Walsatbits on Tuesday counted 73 million page views for its discussion boards, according to a report by Massib. During the past week, it saw nearly 700 million page views. RedSit is already the 46 most popular site on the web, showing more than 78 million unique visitors in December, according to comScore. On Wednesday, Reddit’s mobile app lengthened its biggest single day of downloads, industry watcher Apptopia said.
But when the memes take off and the excitement goes away, GameStop will revert to that struggling video game retailer when gaming is increasingly moving toward streaming and the idea of stepping into a physical store is still a nerve. -Disinfective possibility. At the time, stock analysts say, whoever left the shares, their value would evaporate.
“It’s unnatural, insane, and dangerous,” Michael Barri, a prominent Gametop investor and one of the subjects of the book and film, Now written in a deleted tweet. His nearly $ 17 million investment in the market has increased to $ 250 million as of Tuesday, Markets Insider reported.
Michael Pachter, A long-time video game industry analyst at Wembush Securities, said that earlier this week he didn’t even bother to update his stock price expectations for Gameshot because stocks started going crazy last week. “Who’s listening?” They said. “Nobody sells what a side-by-side analyst says right now.”
For them, there are reasonable explanations why people might get somewhat excited about GameStop. Before selling to PetSmart, Ryan Cohen helped convert Chevy, one of its newest board members, into one of the world’s largest online product vendors. GameStop is also on a track to be profitable again.
But now GameStop has not come close to explaining the stock price. “It’s a Ponzi scheme,” said Pachter, referring to a type of fraud that appears to be making money, but is actually only left by funding from new investors. “There’s a point where it will go down.”
He suspects that this may happen after the company’s quarterly results were reported in March, at which point executives and investors are allowed to sell their shares.
One thing that surprises analysts is whether Reddit investors will lose millions whenever the stock eventually returns to Earth. Rogozinski, the man who helped find the Reddit community, said his approach is to invest more like gambling than traditional analysis and strategy. Its members, whom the community identifies as “degenerate”, often encourage each other to push all their funds into one stock, riding it up and down. Their positions are“Hold the line” and “Diamond hands” (hold on to your stock for a long time) and YOLO (you only live once).
He told the WSJ that he had never imagined the Reddit community as what it would become from its inception. “It’s like watching one of those horror movies, where you can see the bad guy slowly going up the stairs,” Rozowski said.
Meanwhile, social media hype continues on Reddit, where users are announcing their intention to buy and hold more GameStop shares, all to send prices higher.
“My mom told me it’s time to sell,” a Reddit user wrote on a post about GameStop’s stock move. “Should I get a new mother?”
“Yes,” another user answered. “the answer is yes.”