The world of finance can be pretty arcane at the best of times, but things don't come much more bizarre than the infamous "GameStonks" fiasco of January 2021. With little more than a decent chunk of cash and the overwhelming urge to cause mischief, the denizens of Reddit's "Wall Street Bets" board managed to send GameStop's stock price skyrocketing. If recent evidence is to be believed, it looks like they're at it again.
GameStonks (an affectionate nickname borrowed from the beloved "Stonks Guy" meme) was a baffling episode from earlier this year wherein a team of amateur investors on Reddit attempted to turn the tables on Wall Street. Upon learning that a handful of hedge funds intended to short stock in GameStop (a process by which investors "borrow" stock in a struggling company, sell it off, wait for the price to drop and buy it back cheaper, pocketing the difference), Wall Street Bets decided to heavily invest in the company's stock and artificially inflate the price, wrecking the stockbrokers' plans and potentially leaving them millions in debt.
The whole affair has largely dropped off the radar in recent months aside from a small earnings announcement from GameStop towards the end of the fiscal year, but multiple Reddit boards have been quietly keeping an eye on $GME and other so-called "meme" stocks like AMC Entertainment. Following rumors of another incoming short squeeze earlier this month, calls to action started to circulate on subreddits and social media, and before long GameStop's flagging stock price was starting to soar again. At the time of writing, $GME is up over 25% over the course of the month and is sitting at a share price of over $200 for the first time in months.
This is certainly bad news for any investors banking on another short squeeze, but for those more invested in the business things couldn't be better. Upon the announcement of his stepping down from the role, GameStop CEO George Sherman looked set to receive a payout of almost $180 million by cashing in his stock in the company. By today's prices, his 1.1 million shares in GameStop would net him closer to $230 million.
The effects of GameStonks might have been felt around the world, but even those who weren't directly implicated in it could soon join in the fun in their own way. As part of its April Fool's Day offerings, Epic decided to add in the Stonks Guy as a Fortnite skin. It might not have quite the same high-octane thrill as holding the future of a company in one's own hands, but any fans who feel like running around the map yelling "Buy, buy, buy! Sell, sell, sell!" will doubtless be pleased.
In any case, it appears the world is not yet free of the roller coaster that is GameStonks. With the share price so inflated, it seems that anyone hoping for a short squeeze is out of luck for now, but as ever, the financial market is an unpredictable beast.
Earlier this year, the unthinkable happened to GameStop: the games retailer's stock price started to surge, seemingly out of nowhere, by over 1000 percent in average price. The majority of 2020 forced many consumers to spend less due to the Covid-19 pandemic, causing the company's already declining profits to drain millions of dollars. Average stock price for GameStop in November of last year was as little as $11 per share, but towards the end of January this year, it's stock price topped out at over $350 per share. For a company notoriously struggling before 2020 to come out with this sudden windfall is extremely unusual, at no fault or success of its own.
- Milla Jovovich wanted Monster Hunter viewers to feel ‘like they were playing the game for the first time’ How playing Capcom’s video game help