GameStop’s share price has risen again and has more than doubled within a few hours

The video game retailer’s stock was the subject of a fascinating war between Wall Street hedge fund managers and everyday Reddit investors last month

The share price shot up more than 2 in late January000 percent to highs of around $ 350, but had spent the last few weeks in the 40s

It rose rapidly on Wednesday and the US company was suspended twice before closing just above $ 91

Reddit’s r / WallStreetBets community again appears to be at least partially responsible for the surge Reddit itself crashed for many users yesterday, although it is unknown whether increased activity on subreddits for stocks caused the outage

The reason GameStop saw its first surge in January was because the r / WallStreetBets community opposed an investment firm’s tactic known as “short selling.”

Selling short is a tactic used by hedge fund managers and investors who predict that the value of a stock will go down

Short sellers borrow stock of a stock, usually from a broker-dealer, before immediately selling it at market price

You then have to buy back those shares at some point and return them to the lender

If the stock’s value goes down as predicted, the short sellers make money by buying back the stock at a discounted price, returning it to the broker, and pocketing the difference

However, if the value of the stock goes up, the short sellers will still have to return the stock, which means buying them back for more than they sold and losing money with it

Members of the community found that investment firms were short selling GameStop stock at high prices, essentially betting that it would depreciate

They decided to en masse GameStop stock, which skyrocketed in value, and forced companies to close their short positions at huge losses

This seemed to end the saga as the stock stagnated for several weeks – but we have now moved into chapter two

A number of factors could have influenced this surge, which could be related to the resignation of GameStop’s chief financial officer on Tuesday, it could be the investment firms trying to sell the stock again, or it could be something completely different. p>

Ihor Dusaniwsky, managing director of predictive analytics at analyst firm S3 Partners, told The Guardian that she doesn’t believe short covering is “the main reason for this price movement.”

There’s nothing to say that GameStop’s stock price couldn’t continue to rise like it did last month

The last time the surge was stopped by investment apps like Robinhood, which restricted the purchase of GameStop and other “meme stocks” and earned them extremely negative press

The r / WallStreetBets community preaches the value of holding the stock and bringing its value “to the moon”

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World news – AU – Why the GameStop share price rises again after another Reddit push and what next comes

Source: https://inews.co.uk/news/business/gme-share-price-gamestop-stock-reddit-wallstreetbets-latest-news-887129