GameStop’s meme stock has another wild meme moment

Two Wall Street traders wearing Mario and Luigi hats watch another rollercoaster ride in horror.

A photo: Kotaku / Spencer Platt (Getty Images)

people were waiting GameStop Bubble clap for over a year. Instead, the ailing video game retailer just posted another record breaking week on Wall Street. Income down. Employee morale is in the pits. But the company’s shares rose from $78 a share last month to more than $185 in early trading today, following major moves from its new tech leader and news of its first stock split in 15 years. Physical games are dying, but GameStop zombie games continue to exist thanks to the marketplace. endless addiction to casino style gambling.

So what exactly is happening? Here’s one explanation for the new meme stock rage: Last week, GameStop chairman Ryan Cohen bought another 100,000 company shares. It was a move valued at around $10 million and a signal to other investors – and Cohen’s rabid fan base in the meme community – that he had big plans and full confidence in the weakened retailer.

This week GameStop also announced upcoming share split increase the total number of available shares from 300 million to 1 billion. This move lowers the price of each individual share while maintaining the same value for all current investors. This is something companies often do to create short-term buzz, but in the case of GameStop, it can also make it easier for random posters to get involved on Reddit and elsewhere.

Another explanation for why GameStop stock is on fire again is that nobody really knows what’s going onand everyone is just trying to catch the last wave before everything falls apart again. Stock trading is gambling. Historically, no one, no matter how smart they think they are, can beat the market. But every lottery has a winner, and many people think it could be them.

“GameStop isn’t doing anything productive,” says Kevin Mullally, professor of finance at the University of Central Florida. told NPR yesterday. “But it’s like people buying stones for pets or Beanie Babies. These things are basically worthless. It’s weird and I don’t understand it. But there are a lot of weird things people buy that I don’t understand.”

The graph shows GameStop volatility during the week.

Screenshot: Google/Kotaku

Throughout GameStop stock meme saga, there has always been a debate about how much of this was caused by online trolls and not by large and medium professional investors. But no one can deny the madness of GameStop boosters who constantly drive themselves into the waterholes of trading tips such as WallStreetBets and more recently, p/GME. “Obviously the 16%+ premarket is not good enough to be reported. bloomberg“, – says in current top post on the GameStop stock community that continues to be defined by its collective execution of mainstream market outrage and nothing else. “Today will be the first day in over a year that I won’t watch the first call before a fight!” reads another. “I’m going for surgery. God bless Gmerika.”

Posters like this may not be enough to be responsible for the massive fluctuation in GameStop stock, but the sheer id fueling their enthusiasm is far more compelling than the alternative, which is that “it doesn’t matter, it doesn’t matter at all“.

GameStop’s original argument in 2020 was that the company still owns a huge amount of real estate, the PS5 and Xbox Series X/S are about to be released, and the market is undervaluing them at just $5 a share. How are things going with GameStop now? There isn’t one, at least not one, that isn’t connected to the cult of personality around GameStop’s new man behind the scenes. Chewy founder Ryan Cohen. Cohen’s claim to fame was selling pet food over the internet. A year later, no one understood how this would affect the business, where most games are now purchased digitally directly through the online stores of Sony, Microsoft and Nintendo.

Even former Nintendo of America president Reggie Fils-Aimé didn’t get it and ended up throwing himself off the GameStop meme train shortly after he left the station because “there was no formulated strategy“. To the extent that any strategy exists, it so far revolves around transforming GameStop into a “tech” company and launch of a new crypto platform. One good scam gives birth to another.

As always, the people left out of Cohen’s Machiavellian market moves and Reddit meme postings are the thousands of people working in real stores that make real profits. “Why should we hire the ‘best talent’ yet pay less than White Castle for assistant managers,” the article reads. main post today on GameStop’s “power of profits” Reddit employee. The one directly below it just reads “unfortunate”.

Despite golden parachutes for executives and incomprehensible rallies on Wall Street, store employees usually tell Kotaku they haven’t received a raise in years, despite record inflation and higher rates at big-box stores and street-level supermarkets.

“Would you like to know my opinion about stocks?” said one current assistant manager. “All you do when you buy their shares is let them—sorry for my English—treat employees like crap. They see they’re still making money, they’re still going to stay the same.”

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