GameStop is a video game retailer that experienced a significant increase in its stock price in early 2021. The stock price rose from under $3 to as high as $483 in late January 2021, causing hedge funds that had bet against it to lose billions of dollars. The rise in the stock price was driven by a group of internet traders, including members of the WallStreetBets subreddit, who believed that the company was undervalued and that its stock price would rise.
The stock price was volatile, with significant fluctuations in both directions. On February 1 and 2, the stock price for GameStop declined substantially, losing more than 80 percent of its value from its intraday peak price, recorded during the previous week. GameStop shares lost 60 percent of their value on February 2, closing below $100 for the first time in a week. Reports estimated that about $27 billion in value had been erased.
On March 24, the GameStop stock price fell 34 percent to $120.34 per share after earnings were released and the company announced plans for issuing a new secondary stock offering. On March 25, the stock recovered dramatically, rising by 53 percent.
The stock price of GameStop has continued to be volatile, and the company is still struggling. The meme status of GameStop has likely bought the company some time for a potential turnaround, but it hasn’t been a silver bullet. The best way to support GameStop isn’t really to buy GameStop’s stock, it’s to buy something from GameStop, which many people still aren’t.
