Social media investors hit multi-million dollar paydays as they battled Wall Street for GameStop’s stock price, experts say it can’t last

GameStop stocks are on an epic roller coaster ride that took them to the stratosphere. But how long?

Many of today’s adults grew up in GameStop stores – they bought and sold consoles and games there They also stood in line for launches – Now some of those gamers have gotten rich by buying shares in the company and encouraging their friends on Reddit to to buy these too.GameStop’s shares have risen higher than ever in the past few weeks, all because activity among social media investors spurred that Wall Street had bet heavily that the company would fail , but as the price continued to rise, investors were forced to reset their bets, which caused the stock to skyrocket and then swing wildly

Jaime Rogozinski, the obvious founder of the Reddit community at the center of it all, told the Wall Street Journal it was like “a train wreck that happens in real time”” Keith Gill, the Reddit community trader who helped kick-off the fight, told the newspaper he “wasn’t expecting this”

Last week, Thursday alone, GameStop stock hit an all-time high of $ 49202 per share, only to fall more than half a minute later the next day, trading closed at $ 325

GameStop itself hasn’t changed radically in the last month it’s still a difficult retailer facing an uncertain future in the face of the rising tide of online shopping, but its stock is up as much as 1 year ago800% up – that’s not a typo. Those dynamic resulted in Wall Street investors betting against the company’s future losing billions of dollars, and the excitement is driving the hype even further

Over the past few weeks, the financial world has watched in shock as GameStop stock (or “Stonk” as the Reddit community calls it) climbed to unthinkable levels, even Elon Musk tweeted about it, referring to one of his 43 million followers Link of the Reddit community investing in GameStop called r / WallStreetBets

Until the end of regular trading on Wednesday, Jan On 27, the stock was $ 347 per share, from all-time lows of around $ 3.30 per share in the summer of 2019, and in over-the-counter trading it fell more than 37%, only to rise again the next day, with even more dramatic moves: the stock rose to $ 49202 before falling nearly 60% to close at $ 19744. In the over-the-counter trading, it rose back to $ 31199

Meanwhile, stock market trading apps appeared to either stop or limit the purchase of GameStop stock for at least part of the day

Popular stock trading app Robinhood highlighted what appeared to be the most restrictive new rules.People had raised concerns about Robinhood for some time, saying it had “gamified” stock trading to a potentially dangerous level, now it’s becoming utter market manipulation Also accused by at least one pre-filed class action lawsuit on his part, Robinhood said last week that market rules had effectively forced it to put these restrictions in place

Read more: GameStop’s stock spike is fueled by slang from Reddit’s r / WallStreetBets community, which means this:

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“We’re seeing a phenomenon I’ve never seen before,” said Jim Cramer, a Wall Street commentator at CNBC and a former hedge fund manager, during a segment when stocks began to swing for the first time and GameStop could just be the beginning “It’s crazy”

This seems like a strange story where Wall Street investors are overrun by excited social media users, it was fun for some to see these investors get caught up in a group of people posting rocket emojis, be taken to the cleaners and say that GameStop stocks will “go to the moon”

But for some on Wall Street, it’s the latest sign of how social media can change everyday life Twitter changed the world of news and politics YouTube and Instagram changed the fashion, beauty and entertainment industries. Now, Reddit is stepping in against Wall Street at

These worlds have overlapped too.Fans of Korean pop groups known as K-Pop-Stans are posting a barrage of tweets about their favorite stars to overwhelm racist hashtags on Twitter, and TikTokers teamed up to launch President Donald Trump’s re-election campaign to confuse

Now, encouraged Reddit communities are talking about taking over other companies that Wall Street broadly is betting against. The Reddit crowd is already trying to get BlackBerry, the once popular cell phone maker, which is now primarily focused on selling enterprise software And Redditors are also targeting the ailing film chain AMC, pushing its stock from around $ 2 per share to over $ 8 in after-hours trading through Wednesday, Jan It closed at $ 19.90 a share on 27 before falling to $ 12.75 The next day, it fell even further to $ 863 a share

The actions of the Reddit community had such an impact that TD Ameritrade took the extraordinary move last week to restrict trading in Game Stop and AMC stocks, “out of an abundance of caution in unprecedented market conditions,” Nasdaq also warned from stopping trading stocks he believes are being manipulated by social media

Meanwhile, traffic to the Reddit community is crashing at the center of the drama, r / WallStreetBets, Records Mashable reported that r / WallStreetBets counted 73 million page views for its discussion boards on Tuesday, January 26 as the stocks swing started about 700 million page views in seven days Reddit is 46th according to comScore most popular website on the internet and had more than 78 million visitors in December and on Wednesday, Jan 27, Reddit’s mobile app hit the biggest day of downloads, industry watcher Apptopia said

The whole drama even caught the attention of Saturday Night Live, which mocked Reddit investors as the newest sign on Wall Street isn’t working

But when the memes stop and the excitement subsides, at a time when gaming is increasingly moving towards streaming and the idea of ​​entering a physical store is still nerve-wracking, GameStop will revert back to the struggling video game retailer prospect during A pandemic At this point, stock analysts say, the value of those who still hold stocks will evaporate

“This is unnatural, crazy and dangerous,” wrote Michael Burry, a well-known GameStop investor and one of the subjects of the book and movie The Big Short, in a now-deleted tweet about his roughly $ 17 million investment in the Company soared to at least $ 250 million last week, gave or took a few swings in its stock price, Markets Insider reported

Michael Pachter, a longtime video game industry analyst at Wedbush Securities, said he hasn’t even bothered to update his stock price expectations for GameStop since the stocks went crazy “Who’s listening?” he said in an interview last week, “Nobody cares what a sell-side analyst is saying”

For him, there are reasonable explanations as to why people might be a little excited about GameStop.One of his newest board members, Ryan Cohen, made Chewy one of the largest online pet products retailers in the world before selling it to PetSmart, GameStop also on the way to being profitable again

But that doesn’t nearly explain GameStop’s stock price now. “It’s a Ponzi program,” Pachter said, referring to a form of scam that appears to make money but is actually only backed by funding from new investors. ” There is a point at which it will go down “

Many Reddit users who buy GameStop stock see it as a way to fight Wall Street greed

He suspects this can happen after the company released its quarterly results in March At this point, executives and investors on the board of directors are allowed to sell their shares

Analysts are watching whether Reddit investors will lose their millions if the stock eventually falls back to earth. Rogozinski, the man who helped found the Reddit community, said their approach to investing was more likely resembles gambling as traditional analysis and strategy. Its members, whom the community refers to as “degenerate,” often encourage each other to put all their money into one stock and drive it up and down. Their posts come with phrases like “hold on.” the line “and diamond hands” (hold your stocks tight for a long time) and YOLO (you only live once) broken

He told the WSJ that he never thought the Reddit community would transform from its beginnings to what it has become “It’s a bit like watching one of those horror movies that you’re in sees the bad guy slowly going up the stairs, “said Rogozinski

Even Keith Gill, the community member who sparked the first GameStop battle, told the Journal he was surprised at what happened to it

“I thought this trade would be successful,” he said, “but I never expected what happened in the last week”

In the meantime, the social media hype continues on Reddit, where users are declaring their intention to buy and hold more GameStop stock in an attempt to raise prices even further

“My mom told me it was time to sell,” one Reddit user wrote in a post on GameStop’s stock movement, “Should I find a new mom?”

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World News – US – How Reddit Made AMC, GameStop Stock Wild: A ‘Crazy’ ‘Ponzi Scheme’