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A social media posting has triggered another 'run' on GameStop shares: the stock market value briefly rises to over $10 billion.
Update from May 14, 2024 (5:30 p.m.): Plus 150 percent over the course of the day, plus 350 percent since the weekend: GameStop shares continued their upward trend to over €60 at times on Tuesday.
In the USA, the pre-market price is almost 100 percent above Monday's closing price – albeit with high volatility and temporary setbacks. At 5:30 p.m. German time, GameStop shares were trading at around $/€50 – a five-fold increase in just a few days.
It is completely unclear whether the speculative bubble will burst or become even larger for the time being: given the tight market and the great attention, even tiny impulses are enough to push the price in one direction or the other. The risks are correspondingly great.
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Report from May 13, 2024: Nothing significant has changed in the fundamentals of GameStop Inc. in the past few months: The US video game retailer is still looking for a sustainable business model in light of booming digital sales – there is hardly a quarter that is not marked by declining sales. In Germany, only just under 70 of what were once more than 200 branches still exist.
Regardless, GameStop shares remain a plaything of speculators and gamblers: three years ago, an unprecedented short squeeze sell-off with targeted, organized mass buy and sell orders from small shareholders triggered immense price jumps.
This crazy story seems to be repeating itself: Compared to the previous week, the 'value' of the paper has increased doubled smoothly. In the past twelve months there has been a continuous decline from what was once €20 to less than €10. Now the 'comeback': In the late afternoon German time, the GameStop share was trading at over €26. The US Securities and Exchange Commission has suspended trading in GameStop securities several times.
The reason for the renewed hype is obvious a posting on the X channel of the 'Finfluencer' Keith Gill aka Roaring Kitty (“Hissing kitten”), which already played a key role in the GameStop case at the beginning of 2021. Yesterday, Sunday, he published a sketch of a man holding a gamepad in his hands and leaning forward.
The simple drawing was interpreted as a signal that another rally was imminent – a kind of self-fulfilling prophecy that promptly came true. The further course of the price can hardly be seen in advance: further increases are just as possible as an abrupt end to the 'party', which – as in 2021 – is likely to produce few winners and far more losers this time.
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