So, what happened to Gamestop?
If you didn’t know, this is an American video game, consoles, and accessories retailer that has plummeted for 6 years due to declining profits. Thanks to social media, this news has been vastly heard by the masses. As the whole gaming industry has moved online and all the disks don’t matter anymore, GameStop itself has closed more than 400 stores in the USA in 2020 alone. Therefore, this company has become very popular among Wall Street short-sellers, and the more GameStop lost positions, the more hedge funds got richer.
People on Reddit decided to change the situation up, and as this thing has started as a joke, later it brought us to the situation where investors are losing millions of dollars. WallStreetBets are who is in charge of that: it is an active community of hobby traders with almost 3 million subscribers. Its users began to urge to massively buy up GameStop shares. The goal is to teach the Wall Street boomers a lesson who, according to Reddit, deliberately drowned the company for their own benefit.
YOLO has become the unofficial slogan of the community. Gradually, discussions about the “revival” of GameStop became more active. And in January 2021 the explosion happened — as a result, by January 26, GameStop stocks reached the $150 mark, and the major media drew attention to the Reddit operation. The real hero of the community is. Back in 2019, he made a YOLO bet by acquiring $50,000 worth of GameStop shares. In January 2021, they turned into almost $23 million.
Of course, Investment funds are very unhappy and call it a coordinated digital attack. According to analyst firm S3 Partners, short-sellers playing short on GameStop have already lost more than $ 6 billion. And this is definitely no joke, but there are people who support WallStreetBets — for example, Elon Musk, who made a tweet where he left a community link and referenced the popular Stonks meme. The entrepreneur’s tweet further accelerated GameSpot’s rise in price — the shares are now worth $230 and it’s totally crazy!
Elon’s tweet started a whole gigantic wave of memes on social media: you don’t have to buy Instagram followers if you’ve posted it and want attention; it will come no matter what. People are interested in this phenomenon and are trying to take their part in this movement. CNN’s business newsletter summarized the first results of the GameStop accident and said that internet flash mobs are unpredictable, ruthless, and merciless. “Never underestimate the power of bored millennials with Robinhood accounts”, — they noticed, and it’s totally true.
The more people were speaking about it, the higher GameStop shares’ price became — investors weren’t even paying attention to what was said in the posts about GameStop and rushed to buy the stocks because they saw the hype around them. This phenomenon proves how powerful social media websites can be and how these can make people ridiculously rich or lose all of their money just because somebody decided to play a joke. One thing provokes another and a circle is closed — Wall Street prognoses that the GameStop shares price will go back to its norm sometime after the hype will go away though. How it’s going to happen is the question of the nearest future.