GameStop, the actual physical company that sells video games and, increasingly, Funko Pops, is enduring the coronavirus pandemic just like the rest of the planet. But the company’s stock, however, is doing better than ever thanks to a fight between day traders on Reddit and an investment company that thinks they’re all fools.
The battle, which is having a real impact on the volatility of the stock market, took a turn on Friday as the company’s stock price hit an all-time high. GameStop was for sale in 2018, and the shifting industry of buying and selling video games has made it less essential to gamers, especially as downloads become the norm and the world continues to endure a pandemic. All of that was why the stock price was so low to begin with, but it became a bit of a pet project for Reddit day traders who invested in the stock of the company and have sparked a roaring comeback for the business that used to charge you very little for that copy of Tiger Woods PGA Tour 2004.
On Friday afternoon, trading of GameStop stock was abruptly halted after it saw a Reddit-fueled surge in trading.
— Bloomberg (@business) January 22, 2021
According to Bloomberg, the volatility is in part because of a Reddit campaign to pour huge amounts of money into the stock.
GameStop’s 75% gain through Friday comes after it more than doubled the week before and marks the most volatile 10-day period on record, data compiled by Bloomberg show. The stock was halted at least four times in New York as it surged as much as 79% to $76.76 as Reddit users ran wild. It was was last 44% higher after trading resumed.
At one point, the video-game retailer was the most actively traded U.S. company with a market value above $200 million, data compiled by Bloomberg show, as millions of shares exchanged hands every few minutes.
As Bloomberg’s reporting and many others have pointed out, the stock price of GameStop is now no longer tied to what the company is doing even a little bit. Prices for these things often reflect news about the overall health of the company, but GameStop is up 226 percent in January, according to Bloomberg, for doing little more than becoming a topic of interest online among day traders. And while amateur day traders on TikTok and Reddit encourage people to buy more and more to help the stock get bigger, professionals on Wall Street are lining up to reap the benefits once they fail.
As Vice pointed out, Citron Research is short selling GameStock, essentially betting against everyone who is buying stock of the company and assuming that its value will not hold.
“Everyone on Twitter never has a losing trade. Everyone on Reddit is a genius,” Andrew Left of Citron said in a much-anticipated video about why GameStop investors are wrong. He suggested the people buying GameStop stock are going up against hedge funds who know much more than them, and that GameStop investors are losers who are trying to hack his Twitter account, are ordering pizzas to his house, and signing him up for Tinder.
As GameStop trended on Twitter on Friday, people couldn’t help but make it a meme of sorts.
“The name of the company, Gamestop It is a cutting edge video game store out of the Grapevine, Texas awaiting imminent patent approval on the next generation of virtual reality omni directional gaming devices that have both huge military and civilian applications now.” pic.twitter.com/FS31zsd8GM
— Gannon Breslin (@gannonbreslin) January 22, 2021
The last time I stepped into a GameStop they offered me $25 for my Xbox and a copy of Dance Dance Revolution but good for them I guess pic.twitter.com/1E8UYHRagU
— Jake Lucky (@JakeSucky) January 22, 2021
lmao the power of meme-ing in the stock market is incredible
gamestop stock is up 69% for absolutely no reason pic.twitter.com/xJoHospC7N
— Brett (@Relentlessbored) January 22, 2021
It’s making for a very viral and weird moment on the stock market, but it’s another example of how the market is increasingly unrelated to the actual heath of the economy. As millions of people remain unemployed, people struggle to provide for their families, and coronavirus continues to put a strain on daily life in America, a stock like GameStop is fluctuating wildly and, for some, appears to be a get rich quick scheme that’s actually working. For some, for now, at least.