GameStop had a recent share price explosion, all thanks to some Redditors manipulating the price.
The dying Gamestop share price is at weird a level of undeath at the moment, and billionaires are memeing with the masses.
Magnates such as Elon Musk and Chamath Palihapitiya of Virgin Galactic are playing around. So far, they cost some short-sellers on Wall Street up to $5 billion.
GameStop has been on its last legs for well over a few years now. The games retailer has been on a downward spiral due to the slow death of physical gaming titles.
The company itself has seen itself go as low as 2.8 dollars per share, and there were no takers.
Around two weeks ago, however, Redditors at r/WallStreetBets decided to make some quick money.
As a subreddit of mostly daytraders, the collective hivemind decided to make GameStop’s stocks shoot up exponentially.
So far, in two days, between January 12 – 14, the stocks shot up to $39.91 per share. Between the 25th until now, GameStop’s shares are sitting at between $76.79 to $124 per share. The shares have an expected high of as much as $240 today.
The increase in GameStop’s share price does not come from the value of the company. It doesn’t come from nostalgia or the goodness of Redditors’ hearts.
It comes from the subreddit trying to gain some money and lose Wall Street short-sellers too.
For the unfamiliar, investors generally gain money from short-selling. Many of these borrow stocks when they are low and sell them when stocks are high.
After a certain amount of time, they then return the borrowed stocks when everything goes low again.
Many short-sellers earn the money from the difference of selling high and buying low. Reddit destroyed that fine balance that most investors rely on, especially those that need to return their borrowed stocks soon.
As Reddit created short-term visibility, trade volumes went higher and higher. High-profile figures like Elon Musk and Virgin’s Chamath Palihapitiya bought more GameStop calls. The move exploded the share further, and some people are sweating profusely.
According to Business Insider, short-seller losses are now at $5 billion in only a month. Some capital management companies reportedly lost as much as $2.75 billion on short stocks, including GameStop.
Reddit is not stopping at Gamestop share prices. The subreddit is looking to kill more hedge funds and old school traders at the stock exchange.
Some are targeting other stocks, including AMC, Blackberry, and more.
Featured image courtesy of Adam/Know Your Meme
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