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Ralph Nelson

NEWSBREAK 3/11: Gamestop's Wild Ride Continues

If you haven’t heard about Gamestop’s historic few months, you’ve been living under the world’s largest rock. In a rollercoaster of epic proportions, Wall Street and Main Street have seen the once ailing retailer go from a valuation of roughly $17 on January to nearly $350 on January 25th, then back down to to the mid $40S in February and now, in the last two days, all the way back up to $265 at the time this article was written.

This all but unprecedented volatility has become something of a rallying cry for retail investors raging against the machine of hedge funds and big money institutions. In short, if you’ll excuse the pun, a reddit user on the subreddit r/wallstreetbets noticed that Gamestop had the potential for a short squeeze, as long as stock buyers called their bluff. The first rally came after hundreds of thousands of at-home traders flocked to Robin Hood and other trading sites to keep GME’s price afloat. However, RobinHood limited buying on the day the squeeze was meant to really take off, taking the wind out of many trader’s sails and ensuring that traders like me will use investment products like these that have my best interests at heart.

After the failed gamma squeeze, many assumed Gamestop was dead in the water. But a recent announcement that Ryan Cohen, co-creator of Chewy, would oversee the video game brick and mortar’s transition to e-commerce has sent the stock to the moon again.

The tricky thing about Gamestop and similar types of stocks, which have been dubbed “meme stocks” after their internet origins, is the immense volatility. This type of day trading is not for the feint of heart and can be more akin to gambling than conventional investing. Many will make hundreds of thousands, and many more will lose money. Just on Wednesday alone, the stock went from $344 to $189 and back to $265 in the span of an hour. For most stocks, that’s a lifetime of valuation flux. For Gamestop, it was just another 60 minutes.

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