2021 is a good year for Gamestop because they have been mentioned significantly on all platforms. Reddit leads in a group where discussions have been held on individual investing and stocks. Many people learned a crucial lesson – any player in the stock market can influence the value. As short-sellers hoped that the price would drop, it kept rising rapidly. It may be a surprise but honestly, it can happen with any other company. The whole story began when a trader thought that Gamestop stock was undervalued and it could be projected that it would sell at a higher price later through a “buy low, sell high” philosophy.
You must be questioning why the Gamestop stop appeared valuable. The idea seemingly had been shared on Reddit a few years ago when the company was undergoing changes. Although not all changes were positive, the company is predictably in the right direction, increasing investors’ confidence. David Azzato remembers how at the onset of the pandemic, several businesses closed up and few people believed that Gamestop would prosper. One of the people who would have highly feared the collapse of the stock value was Ryan Chewy because he had a huge stock at the time.
For some time now, there have been discussions on the need for the company to go digital. According to David Azzato, should it go on, it is likely the stock price will go up further. The price of the Gamestop stock also rose when things went south for hedge fund managers. It is still arguable but it was almost clear that a group of day traders were slightly more powerful than their counterparts – investment companies. Short-sellers had the hardest time because they don’t own the shares which means they have little time to make profits.
A rise from $17 to $347 a share in less than 30 days is a new phenomenon in the market. The market fluctuations may be influenced by the unlikeliest of all. In the case of Gamestop stock price, it is a group of day traders online. Going forward, professional investors won’t like the idea that day traders cause massive market fluctuations as witnessed with Gamestop.
Several lessons can be drawn from the Gamestop stock issue. As David Azzato puts it, investors and traders especially short-sellers should be careful because it could happen with any company. It is even a thorn in the flesh for hedge fund managers because they are likely to lose lots of money.
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