Wondering what has happened to cause yet another rise in interest in GameStop on the stock market? Read below for the latest.
The year 2021 started off to a veritable bang when January saw an unprecedented – and wholly unforeseen – battle between Wall Street and what seemed to be a handful of stock-savvy Reddit users, over GameStop.
Until January, GameStop represented one of the last examples of a now pretty much defunct era of retail. While it has managed to endure where, say, a comparable destination like Blockbuster has long since buckled, it seemed clear to many that the future was bleak for this business.
The reasons are manifold. For one thing, digital shopping and downloadable content (otherwise known as DLC) have long since begun to supersede physical discs and in-person purchases. Due to the ways in which second-hand sales were damaging video game production companies, downloaded content was heavily incentivised, and GameStop (and others) simply could not compete. This, coupled with the fact that online gaming destinations GGPoker.com, which do not necessitate a trip to any physical destination, continue to stand out at the head of the leader boards meant that the point of sale was growing increasingly remote, and intangible.
What’s more, in the projected future of gaming, there is little space for physical sales. Cloud gaming, while a relatively new concept, is predicted to revolutionise the ways in which we game – and, more importantly for GameStop, the ways in which we get access to those games.
Still, out of a long running interest from the Reddit group r/wallstreetbets, a handful of internet users managed to make headlines – and internet history – by manipulating the store’s value on the stock market, and effectively launching it into the stratosphere…for a while.
After a whirlwind ride, the inevitable happened, and GameStop’s value once again plummeted – owing, in part, to a number of mistakes made by the stock trading app Robinhood.
Now, however, GameStop’s stock has experienced yet another dramatic resurgence.
What Happened?
By the middle of February 2021, it seemed as though all the heat, mayhem and, for many, out and out confusion were finally dying down, and the ‘natural order’ was being restored.
For the average internet bystander, that ‘natural order’ was the return of wall street news to specialised news sources, and an end to the confusion of trading news. For Wall Street, that natural order was GameStop’s relative obscurity and diminishing value. All seemed to be, for the most part, as it should be.
However, by the early days of March, it seemed as though the ride was starting up all over again, as GameStop’s stock appeared to be rising on the market once again, in a way that evoked all too much déjà vu in pros and amateurs alike.
In little over a week, shares rose from just under $105 to just under $350. There was, of course, less fanfare than we witnessed back in January, and the entire process seemed, to those not at the frontline, to be far more subdued and, in a sense, routine.
There are multiple factors going into this resurgence. Following a virtual hearing between key players and the House Financial Services Committee, interest once again began to rise – particularly among those who may have felt left out during the first wave.
At the same time, increasing interest is being shown in transforming GameStop into a digital gaming provider and, owing to the interest garnered in January, a new wave of potential investors are showing interest in getting behind the once-dwindling retailer, and throwing their two cents into the mix.
Time will tell whether this is just a passing phase for amateur traders, or whether this is the dawn of a new age for GameStop. Watch this space.