GameStop is now the famous stocks in the pandemic situation and this changes the image of investment. In the corona situation, many online game stores had been suffering since the lockdown. They had to shift their business to the online mode. But, strangely, GameStop, which is also a game store, has stood out to be one of the developed stocks in the year. A chain of video game store is suffering and has been insisted to close almost four hundred fifty stores. Now, in this crisis period, how GameStop has become so popular, is something everyone will be curious to know.
GameStop Stock Investment: A Developed Stock Market of the year
There has been occurring a fight in the middle of Wall Street and short Investors to focus on the thirty-seven-year-old game store. These investors proved no sign of decrease. In the year 2020, April, GameStop’s share was bought for three-point two five US Dollar each. In January 2021, on Tuesday, this company escalated to ninety-two per cent and at the end of the way, it had reached one hundred forty-eight US Dollar. Where major market skills were struggling hard to make a profit, how can GameStop skyrocket themselves in two thousand per cent increase in share in such a short time span? From the report, it is coming to know that the users of Reddit are doing all these things. Community users have united in an online Reddit and had pushed the price of the stock. Surely, they have played their game for beating Wall Street down. It is an interesting fact that GameStop is not the one stock who has been benefitted from these users. Many small investors like Nokia have also been escalated by it in very few days.
GameStop Stock: This is what Occurred to Them
GameStop is one of the companies that generally is involved in short-selling. These companies were suffering in the corona pandemic situation due to their common market practice, that is, Short Selling. What it involves is that the investors or professional investors take stock shares to sell. Later they buy it back so that it is possible to return it when the price goes down. In other words, GameStop makes money by betting on the failure of a company. Now it is a question that how someone can make money when it is suffering so much? Actually, they work opposite of the principle of what other investors do. Generally, people on the share market buy something when the price is low and sell them when it goes up. GameStop does exactly the opposite of that. It waits for the time when the price is high and later bet that it will go down in price. But if it increases in price, the investors have to buy some more stock in order to minimize their losses. Melvin Capital is a thirteen billion US Dollar fund which bet against GameStop. A few days later, it became to know that they have faced huge losses because they have lost the bet. GameStop, on the other hand, has been bought by the Reddit user in twenty US Dollar.
Clip: GameStop and Wall Street Battle