Investors on Reddit send GameStop stock soaring

GameStop is expected to lose money this year and next year. Sales growth is sluggish as fewer gamers need to go to stores — or even shop online — when they can download new titles directly from their consoles, PCs, phones or tablets. So why are shares of the video game retailer up more than 275% so far in 2021?
The company can thank a loyal group of investors on Reddit who continue to back the stock even as many others on Wall Street have argued that the shares are overvalued and due for a sharp decline.
The stock was extremely volatile on Monday, and it was halted several times. Shares more than doubled at one point, and finished the day 18% higher.
Posters on the WallStreetBets subreddit have been touting the company aggressively. That appears to have helped fuel a so-called short squeeze in GameStop (GME) stock.
A large number of investors have bet against GameStop recently by borrowing shares and selling them with the hopes that they can then repurchase the stock at a lower price and pocket the difference.
That's a risky strategy: If a stock suddenly spikes higher, short sellers may have to rush en masse to buy back shares or risk losing their shirts. The more that a shorted stock goes up, the bigger the losses become if a short seller doesn't buy back (or cover) their position. That creates the squeeze.
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98 comments

  1. Hedge funds are predatory vultures gobbling up capital and laundering unearned wealth by gutting businesses with thousands of jobs. Watching a bunch of Reddit users screw these preppy grifters out of money has been hilarious and I love every second of it.

    1. @Toby Dion✓ I really don’t like communism but I support it now, in fact I even supported Bernie the communist. In the end we have to choose between the free market and the deaths of 8 billion people under worldwide communism *THANKS FOR YOUR HONESTY*

    1. @mhelo rosario I know it’s hard for you CONservatives to stay on track and use memory that lasts longer than five seconds, but try to keep up with the discussion at hand.

    2. @Edgar Gonzalez dude we’re not living in the 90s 2000s or even the 2010s anymore this next decade is done for the boomers. And fossil fuelers

    1. @Jay Gee distorting stock to be at a price *it doesn’t deserve* ? Lol. Didn’t realize Wall Street was in the habit of handing down moral denouncements straight from the Book of Judge-y. Meh. Still fake news. Wall Street has no morals. The stock price is where it’s at *because it happened*

    2. @Immortal Sugimoto I understand that it has been standard practice in Wall Street to do the same thing but the difference here would be that a small group people manipulated a big group of people into spiting another small group of people. Wall Street manipulates the market among themselves which is scummy but they’re not using a gullible public to spite someone.(Which I at least think is more scummy)

    1. @Jesuschristonacamel good little sheep. Dems are the party of the extremely rich and extremely poor. Look at big tech giants votes. Both parties are owned by the tiny hat billionaires anyway

    1. Since the beginning my friend. Now that the “Plebs” have found the levers of power you can expect the reaction to be less than pleasant.

    1. @Michelle Meister that’s not happening. They’ll short it and they’ll sit and it will drop back down and they’ll make bank. The reddit suckers who were last to sell will lose.

    2. @Bob King basically short sellers make money whenever a stock price goes down. The reason all the redditors are buying amc gm and bb is because these are the most heavily shorted stocks on the market specifically by melvin capital. They say melvin capital already closed his shorts when in reality they have a contract on friday so expect those 3 stocks to boom tomorrow

  2. Wall Street hedge funds: “NOOOO you can’t short squeeze us more we’ve already lost $2 billion on our short positions”. Meanwhile some absolute chads on Reddit saving AMC and GameStop for the memes: “lmao in real life money glitch go brrrrrrrrrr” 🚀🚀🚀

    1. FWIW you didn’t actually SAVE them. Stock prices and the health of a company have been largely disconnected for at least 30 years. Welcome to Bubble Economics 101.

    1. Actually that phase is a lie. Francis Key the man who wrote the national anthem was a slave owner for 30 years in the state of Maryland.

    1. @Karl Marx I think this situation the BIGGER threat to installing UBI, and not hyper-inflation that some people retort against UBI. I may not use my SS to buy stocks, but damn if we have UBI we’d all be participating in the stock market.

    2. @Gabe Mendoza Exactly, most everyone is going to be a loser here save the few that get out at the top. Now’s the time to short!

    3. @Lucas

      You’re probably right, but that’s why I don’t play the stock market like that– I’d lose sleep every night.

    1. Great I found this comment section just at the right time. Gonna send a message across shortly
      Insightful thread indeed

    2. Crypto trading, especially bitcoin has made more millionaire this year alone despite the global economic meltdown it has still held strong. Bitcoin to the moon

  3. Hedgefunds: “Its capitalism baby, dont like it? Get out”

    Also Hedgefunds: “THE PLEBS ARE GOING TO RUIN US! QUICK! CHANGE THE RULES AND REGULATE THEM!”

    1. @Michael Rose they’ve already been bailed out once when Gamestop got to $150. Then they doubled down and GME went up to $350

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