The weird world of world wide web. That’s why GameStop is in the news today.
GameStop is a Texas-based video game retailer, which had a roller coaster first few weeks of the new year. It is in the news because the retail market worldwide has been massively hit by the global medical pandemic COVID-19.
And GameStop is the major player of video games in the United States, the worst-hit country by a coronavirus. As the market started to slow down, market research firms and analysts marked GameStop as bearish, with obviously justified metrics. And the stock has surged over 1600% despite the odds.
It’s stock prices are surging without any (valid) reason. Although it’s still not invalid, but that’s not how capital markets work. Anyone who knows the financial markets and capital investments is well aware of the these work and risks associated with it. In a general trade of buy-and-sell, it’s a simple trade, however, the risk amplifies if you’re betting against the stock, i.e., short selling.
The pandemic forced most retail stores to shut, and the gaming space is poised to be digital with time. No points to guess who takes the hit when stores move online, the local stores, in this case, i.e. GameStop.
It is based on no metric, no fundamentals and absolutely no intrinsic value to justify the price. Citron Research the lead bearish firm on Game Stock clashed with Reddit’s army head-on with currencies. After the rebuttal, GameStop’s market valuation went over $24 billion briefly on Friday.
That’s why GameStop in the news.