GameStop is having a wild day, as individual investors have helped drive the price to $247, up from $18 just a couple of weeks ago
Like many brick-and-mortar companies, GameStop has been struggling with the effects of its customers transitioning to online buying. The company has been forced to close hundreds of stores and faces an uncertain future.
As a result, many investors started short-selling the stock. Andrew Left of Citron Research, in particular, was one of the most vocal in pushing for investors to short-sell. In response, individual investors on Reddit began grabbing up shares of the stock, causing its price to soar. In fact, its price starting rising so much that many short-sellers were forced to buy it back at higher prices.
Elon Musk even got in on the action, tweeting about the phenomenon.
Gamestonk!! https://t.co/RZtkDzAewJ
— Elon Musk (@elonmusk) January 26, 2021
The stock hit $159.18 Monday, before dropping to close at $76.79. On Tuesday the stock rose $147.98, before skyrocketing to $247 in after-hours trading.
Ultimately, GameStop’s fundamentals are unchanged. This episode, however, shows the power of individual investors banding together against Wall Street, and adds an uncertain factor to future investor recommendations.