The Gamestonk phenomenon was a wild ride that left many investors shaken. It started with a Reddit user creating a fake stock, GameStop, and manipulating its price through social media.
The fake stock's price skyrocketed from $17 to $380 in a matter of days, making it one of the most volatile stocks in history.
As the stock's price continued to climb, more and more investors jumped on the bandwagon, further fueling the price increase. This created a self-reinforcing cycle that was difficult to break.
The Gamestonk phenomenon highlighted the power of social media in shaping market trends and the importance of due diligence when investing.
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GameStop's Rise to Fame
GameStop was founded in 1994 by Daniel DeMatteo and Gary Kusin, but it didn't start out as a major player in the gaming industry.
It initially focused on selling software and video games, but its early success was largely due to its strategic acquisition of a small video game retailer called Software Etc. in 1994.
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The company's growth was further accelerated by its decision to open stores in strip malls and other locations with high foot traffic.
GameStop's store count increased significantly in the early 2000s, reaching over 1,500 locations worldwide by 2008.
The company's success can be attributed in part to its ability to adapt to changing consumer behavior and technological advancements.
GameStop's e-commerce platform was launched in 2002, allowing customers to shop online and have games shipped directly to their homes.
By 2008, GameStop's online sales had grown to over $1 billion, accounting for nearly 20% of the company's total sales.
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The GameStop Phenomenon
GameStop shares rose as much as 157% on Wednesday after Elon Musk tweeted "Gamestonk!!" in after-hours trading on Tuesday.
The online stock-investing chat group WallStreetBets has over 2.4 million members.
Scores of WallStreetBets users have driven GameStop's stock to record highs, targeting short-sellers like Gabe Plotkin's Melvin Capital and Maple Lane Capital.
In just 2021, GameStop's stock has seen an eye-popping 750% rally.
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Here are some key stats on the GameStop phenomenon:
- GameStop surged 105% higher at Wednesday's market open after Elon Musk's "Gamestonk!!" tweet.
- The online stock-investing chat group WallStreetBets added over 25,000 users in the past 24 hours.
- GameStop shares closed $147.98 a share on Tuesday, but were last trading 105% higher around $301 a share as of 9:50 a.m. ET.
GameStop Rises 157% After Musk's Tweet
GameStop shares rose as much as 157% on Wednesday after billionaire Elon Musk tweeted "Gamestonk!!" in after-hours trading on Tuesday.
The tweet sparked a frenzy on the popular subreddit WallStreetBets, where members have piled into GameStop's soaring stock.
The online stock-investing chat group now has over 2.4 million members, with scores of users driving the video-game retailer's stock to record highs.
Billionaire Chamath Palihapitiya also joined the Reddit frenzy by excitedly announcing he bought 50 call options in GameStop with a strike price of $115 and an expiration date of February 19.
GameStop's stock surge was swift, with shares closing $147.98 a share on Tuesday, but trading 105% higher around $301 a share as of 9:50 a.m. ET.
The online stock-investing chat group, WallStreetBets, added over 25,000 users in the past 24 hours, according to its own metadata dashboard.
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Legendary investor Michael Burry criticized retail investor behavior on Tuesday for working to boost GameStop's stock and target Wall Street shorts, calling it "unnatural, insane, and dangerous."
Here's a quick breakdown of the stock's rise:
- GameStop shares surged 105% higher at Wednesday's market open after Elon Musk's "Gamestonk!!" tweet.
- The stock has seen a 750% rally in 2021 as retail traders grabbed the opportunity to make money off a short squeeze of institutional investors.
DIY Bloomberg Terminal
The DIY Bloomberg Terminal is a game-changer for anyone looking to stay on top of the market without breaking the bank. Bloomberg Terminals are notoriously expensive, costing at least $24,000 a year, but the GameStonk Terminal offers a free alternative.
Designed in Python, the GameStonk Terminal can be installed on a variety of computer systems, making it accessible to anyone with a computer. This is a huge advantage over traditional Bloomberg Terminals, which are often tied to specific hardware.
The GameStonk Terminal can issue a stock ticker to keep track of GME and analyze the price as it fluctuates during the day. This is especially useful for traders and investors who want to stay up-to-date on the latest market trends.
It can also provide a map of S&P 500's index, pull research and information from Yahoo Finance, Fidelity, Alpha Vantage and other sources. This wealth of information makes it a valuable tool for anyone looking to make informed investment decisions.
The terminal even provides a direct line to the /r/Wallstreetbets subreddit, allowing users to stay connected with the community.
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The Short Squeeze
GameStop's stock price skyrocketed from $17 to $347 in a matter of days, largely due to a short squeeze.
Short sellers had bet against GameStop's success, but the company's unexpected surge in stock price made their bets worthless.
Many short sellers were forced to cover their losses by buying back the stock, which further fueled the price increase.
The short squeeze was a classic example of a market phenomenon where a small group of traders can drive a large market movement.
Retail traders, armed with social media and online forums, were able to coordinate their buying and selling efforts to maximize their gains.
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The GameStop short squeeze was a prime example of how retail traders can take on the big institutions and come out on top.
The price of GameStop's stock continued to rise as more and more short sellers were forced to cover their losses.
The short squeeze was a wild ride for everyone involved, with some traders making fortunes and others losing big.
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GameStop
GameStop shares have been on a wild ride, surging 105% higher at Wednesday's market open after Elon Musk's "Gamestonk!!" tweet. This was just the latest development in a saga that has seen the online retailer's stock rise as much as 157% in a single day.
The online stock-investing chat group WallStreetBets, which has over 2.4 million members, has been driving the stock's price up with a coordinated effort to target short-sellers like Gabe Plotkin's Melvin Capital and Maple Lane Capital.
GameStop's stock has risen a staggering 750% in 2021, with retail traders grabbing the opportunity to make money off a short squeeze of institutional investors.
The Reddit community has grown rapidly, adding over 25,000 users in the past 24 hours, according to its own metadata dashboard.
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Frequently Asked Questions
What happened to the GameStop guy?
Gill, the key figure in the GameStop stock saga, stepped away from public life in 2021 after testifying before Congress. His current activities and stock ownership status remain unclear.
How much did Keith Gill make off GameStop?
Keith Gill made approximately $182 million from his GameStop trades, consisting of a $116 million profit from stock purchases and a $66 million profit from call option purchases. His trades involved buying 5 million shares of GameStop stock and 120,000 call options.
How did the GameStop saga end?
GameStop's third-quarter sales declined by 9.1%, but the company managed to break even through cost-cutting measures. Despite initial stock drops, GameStop's stock rebounded after its earnings report.
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