Last year, one of the most popular options for stock trading was certainly the GameStop company. The brand’s stocks price has taken Wall Street investors on a roller-coaster ride as it has tripled during December and January.
If the stock shares of GameStop were trading on the market for less than $3 in April 2020, they have reached an all-time high in January, being exchanged for $325. However, after the company’s shares became unavailable for trade, their price slowly decreased significantly.
Nowadays, both investors and traders are rather hesitant in putting their trust in such a volatile market – and for all the right reasons. In today’s article, we shall journey to the past, and analyze the events surrounding the GameStop controversy, so we can decide whether or not it is safe to bet your money on this company.
What you must know about the GameStop stock controversy
2021 was a year of great challenges for the Wall Street Investors, as Redditors have engaged in buying stocks for the famous brand GameStop to raise its market value. This comprehensive report will walk you through all the essential aspects of the events surrounding the shocking rise of GameStop’s stock value, which was quite a catastrophe for Wall Street investors while it lasted.
It all started as nothing more than a joke of Redditors. They were mainly trying to make a profit by defeating the shady investing system used by the Wall Street investors to make fortunes out of a company’s misfortune. All the GameStop trading transactions took place through the Robinhood investing app.
However, despite the expectations of middle-class people for Robinhood to remain impartial to their actions, the famous investing app decided to protect the Wall Street reign over the stock market.
In an anti-climactic turn of events, the worldwide popular investing app Robinhood was caught under fire by the internet community after deciding to freeze trades for GameStop on January 28, 2021
All the restrictions were later lifted on 5 February of the same year. Unfortunately, by then, the Wall Street investors’ monopoly over the GameStop stock market was restored, so the Redditors’ trial of bringing down an unfair system was cut short.
GameStop’s stock is on the rise again – but why?
At the beginning of 2022, the controversy surrounding the artificial rise of the GameStop stock value seemed to be forgotten by the trading community. However, a new unpredictable financial shock arrived in Spring, bringing forth another seemingly unexplainable rise in the GameStop stock value.
The tendency of investing in the GameStop stock market came back stronger than a 90s trend, more than a year after the so-called “meme stock” event made the headlines in 2021.
Fair enough, the recent rise in the value of the GameStop stocks is not as radical as in 2021, when the stock value ranged up to $400 per share. However, according to financial experts, the insurgence comes as a shock after the 2022 early predictions for this company, as its current stock value far exceeds the company’s real worth.
Since March 1, GameStop’s stock market value has ranged between $78 and $189. This is quite anticlimactic, as, according to Kevin Mullally, a professor at the College of Business in Central Florida, the real price per every stock shouldn’t exceed $80.
Mullally has shared his disappointment in the insurgence of the GameStop stock market, comparing people’s interest in it to the tendency of buyers who acquire “pet rocks or Beanie Babies”, which are “fundamentally worthless”.
So where does this unexpected rise come from? According to several financial experts, the insurgence of the stock value is directly linked to the CEO of the company purchasing shares in the company.
The CEO’s decision has sparked trust in the evolution of the business in 2022. And since many amateur investors tend to be influenced by the bandwagon mentality, the rise of GameStop’s stock value – although unexpected – is quite plausible.
So, should I buy GameStop stock?
It all comes down to your financial priorities. As seen before, the stock market tendency seems to favor the rich. Hence, investing in GameStop to generate a long-lasting profit is not quite a safe choice. However, it may be a good way of standing against a corrupt system, strongly reinforced by Robinhood company siding with the Wall Street privileged investors in 2021.
Ending thoughts
One thing is for certain – despite the financial experts and Wall Street investors criticizing people’s decisions in trading GameStop stocks, the Redditors are most certainly rejoicing to see the company’s thriving.
The 2021 attempt of having the wealthy investors struggle to gain success from other’s people misfortune is making a strong comeback in 2022, as more and more investors choose to bet their future dividends on GameStop.