GameStop Corp (stock symbol GME), an American retailer of video games, electronics and wireless services, has become one of the most attractive issuers for investors in 2021, in a story that illustrates the changing face of the investment landscape, in the context in which in one month its shares appreciated by 685.5%, according to calculations made by ZF based on data from Investing.com.
Nearly a quarter of this rally was recorded on January 26, when Elon Musk posted on Twitter "gamestonk", a word game consisting of GameStop and stonk, a slang for the word stocks (shares). a 92% rally, rising from $ 76.8 to $ 148 per unit.
Like many other retailers, GameStop suffered last year due to the reorientation of consumers to online, so the losses led the company to announce the closure of 450 stores in 2021. GameStop operates about 6,500 stores in the US, Canada, Australia, New Zealand and Europe. But, surprisingly, the chain of stores with a history of 37 years is today the target of a battle between small investors in the Reddit community and Wall Street shorts that show no signs of fading and that has highlighted some changes in the investment paradigm.
In other words, small investors have added large buy orders to the idea of ruining Wall Street bets that the price will fall, a bet that has proved very expensive for financial professionals over the past month.
On Wednesday, GameStop shares continued their upward trend, rising in the premarket by 68.9%, to $ 250 per unit, according to Investing.com data. In September 2020, Ryan Cohen, investor and founder of online pet food giant Chewy, bought a 13% stake in GameStop. Subsequently, the price began to rise as retail investors entered the purchase to benefit from the low price, taking advantage of what they saw as an ideal buying opportunity. Wall Street investors, on the other hand, saw the market as a chance for a declining bet and a chance to shorten the stock.
Short selling involves selling a company's shares and selling them with the intention of buying them back cheaper when the price drops and making a difference. Many Wall Street fortunes have been made through this type of trading, but on the other hand, if the price goes up, the losses can be huge.
According to The Guardian, about 71.7 million GameStop shares, worth about $ 4.7 billion, are currently traded in absentia. But the company has only 69.7 million shares available for trading, which means that more than 100% of the shares are traded in the market in absentia, according to data aggregated by ZF. As of January 26, 2021, these bets have cost investors about $ 6.12 billion, which includes a loss of $ 2.8 billion on Monday, January 25.
According to ZF's calculations, in the last two weeks, GME shares have advanced 642%, which means that they have increased more than 7 times, the company reaching a capitalization of 10.3 billion dollars.
Bemorepanda prepared some memes.
1.Getting robbed
2.During the pandemic
3.Insurance better
4.Black Friday
5.Hit close
6.Money for trade-in
7.RIP
8.Can I get a change
9.Math is hard
10.Walmart be like
11.Gamestop
12.Trading
13.Chicken and gamestop
14.Mind blow
15.Shopping with mom
16.Love and devotion
17.Couple of clowns
18.Nature is healing
19.Game exists
20.So long
21.High brow
22.Trade in
23.A big collection
24.Trade in credit
25.Gamestop be like
26.The game my son wants
27.Reddit Wall Street
28.Gamestop employee
29.Two stocks
30.Gamers life
31.Busted
32.Gamestop cashier
33.Insurance adjusters be like
34.Walmart says
35.Gamestop credit card
36.Better?
37.Games at home
38.Not my job
39.My car outside
40.Gamestop robbed
41.Gamestop be like
42.Old Pokemon
43.Gamestop sticker
44.Congratulations
45.A fortune
46.30 games
47.Roving hedge
48.Ma'ma
49.Do you game?
50.Trying to sleep
