Throughout Nonsense On Reddit Boards & Wall Street, GameStop Stock Continues To Climb

Posted on January 27, 2021 by Nick Moreno

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In the past couple of days, chatter continues to spread far across the internet as many learn of what looks to be a complete resurrection for the stock price of GameStop $GME. Around this time one year ago, the pricing for GameStop per share only stood at about $12 – $14 at average. But as of reporting, GameStop currently sits at $344.99. But, where exactly did all this come from?

Well on one Reddit board, Wallstreetbets, the posters responsible for the subreddit are directly involved with the astronomical growth in stock value in the handful of days that passed. According to a report from Reuters, the message board alongside its influence of amateur investors are what drawn these insane numbers for the cost per share for GameStop.

One noted push for the increase in share price is sourced from a tweet posted by Tesla & SpaceX CEO Elon Musk who wrote “GameStonk!!” alongside posting the link directing to the Reddit page for Wallstreetbets.

Following the post being made by Musk, GameStop stock was reported to receive a 50 percent increase in after-hours trading leading into today’s opening for the market. However, many are concerned as to what this brings to the future of trading with Wall Street being hit hard as second-hand investments are being made independently and large hedge funds are being drained exponentially.

For one, Melvin Capital is told to close out its position with GameStop in the market, Squawk Box reports. For those unfamiliar, many firms like Melvin Capital and similar shortened the share which essentially bids that the price would continue to decrease giving the groups a big payout. But, the sudden influx in pricing leaves the firms in a loss of roughly $5 billion as of January 26.

And while GameStop investors continue to face a juicy payout, it is projected that the price could leap over 1K by the end of the week. Many Wallstreetbets redditors joke that they would pull out of the investment once the price hits $420.69 – which is very close to happening leading to the market opening on Thursday. Other entertained stocks like Blackberry and AMC also face similar activity, but not to the same levels as GameStop.

I don’t think this is a fad, it is a generational shift in how people think about investing their money. A retail trader will not lean on Wall Street to manage their money and I definitely now see an antagonistic relationship between the old guard (Wall Street) and individual traders who are on the rise.

John Patrick Lee, VanEck ETF Manager

But while many are seeing a nice payout from the madness curated by Wallstreetbets, it is reported that the federal government will be stepping in to either regulate or completely halt how reactive the market has become in the past few days. The Biden administration is said to be “monitoring the situation,” Bloomberg White House reporter Jennifer Epstein tweeted this afternoon.

What is your opinion on GameStop’s current activity on the stock market?

Source: Reuters

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