Is GameStop Making a Comeback? Stock Prices Soar but Will They Stay?

GameStop stock has been on a bit of a rollercoaster. It has risen and fallen multiple times in the last couple of days, which has taken the internet by storm. This has been documented as saviors from Reddit who are sweeping in and saving the stock.

Is GameStop Making a Comeback? Stock Prices Soar but Will They Stay?

Many gamers know of GameStop, the company that they once loved that has been in decline for the past few years and is possibly going to go under. The company’s stock plummeted and reached record lows in 2019. Despite efforts to try and revamp the store, everything seemed hopeless and multiple reports were published about how the retail store could crash and burn. No matter what, the company has stayed afloat even with multiple stores closing over the years. 

Enter the Redditors who took it upon themselves to boost the trade price of GameStop’s stock. In a matter of days, the GME stock went from a mere $30 to be worth over $400. This kind of change is insane and surprised investors everywhere. The big question that remains is where will the stock go from here, and what will this end up doing to the company? Will GameStop end up being yesterday’s news, or will this event catapult the company into the future?

Where Will The Stock Go?

After looking over many of the Reddit posts and the Discord, many traders seem to want to keep their stock. For a little while now, the GME stock has been in fluctuation, with the most current price going around $320. Earlier, the stock price plummeted from the once $460 price down to $126. Traders are still hoping to have that the stock will stay high, but other forces should be watched. These forces are ones like Robinhood and other day-trading apps. 

GameStop's stock price is all over the place as more people buy and sell stocks.

GameStop’s stock price is all over the place as more people buy and sell stocks.

These apps that people have taken a liking to have had a rise in popularity over the years. The reason for this is simple: people like being able to take risks and manage their own portfolios. These apps are also, in a sense, manipulating the market. They are preventing people from cashing in on the GME rollercoaster by taking it off of their apps. People who want to check out Robinhood will get a lovely message that reads, “This stock is not supported.” Many individuals have taken this as a sign to sell, sell, sell.  

One of the biggest pieces of evidence comes from every report that has been written, whether it is this one, a popular article on Forbes, or even this one from Slate. That piece of evidence is the articles themselves. With the popularity of the stock on the rise, written testaments like this only help the hype. In fact, some could say we writers are riding the wave of success as well. “The existence of the article you’re reading right now could be a good thing for GME, because if you’re learning about GME on Slate, you’re more likely to be a retail investor than an institutional one, and thus more likely to bet on the stock’s success than its failure,” Alex Kirshner wrote in their report on the matter. For now, however, it seems the stock is in a sort of limbo that will keep fluctuating until an outside force says otherwise. 

Does This Mean GameStop Is Saved?

This rise in the stock market does help bring awareness to the fact that GameStop has been underperforming these last couple of years. Multiple hedge funds have been betting on when the video game retailer will eventually crash and burn. It is still unclear if the company is actually saved, but media coverage will help to draw in some business. The fact still stands, however, that the company could end up falling apart in years to come. The stores are still struggling to stay afloat in a pandemic-filled world. Even before the pandemic, the retailer struggled with losses. 

The Massive GameStop Short Squeeze, Explained

From the same piece on Slate, Alex Kirshner stated:

It will be hard for GameStop to turn its stock boom into material improvements to its core business that might make a big price more durable. The increased price means the company’s shareholders can pay for college, buy themselves yachts, or just feel good about making a few bucks. But it’s not like the company itself collects a toll every time someone buys a share.

That’s true, the brick and mortar store chain might still be struggling, but there is hope that they could turn into a new store that survives the digital age. 

People could also listen to Taylor Tepper from Forbes, who said:

Short selling or fighting the shorts with risky options trading makes for great stock market theater, but it’s not a good habit for the average investor. Nobody knows where GameStop is headed and when it might get there, and that’s the case with all stock stories. And yet there’s no shortage of analysts, professionals or Reddit commentators who claim to know the where and the when.

What Does This All Mean? Do You Buy Or Sell?

The answer isn’t clear cut in a groove on the back of a disk as many would like for it to be. The stock market is a confusing world if someone doesn’t know what they are doing. Nobody has the answer, but many commentators on Discord and Reddit will have people believe they should keep riding on their shares until GameStop comes back strong and only sell when needed.

Nobody knows where GameStop's stock will end up, but it may not help the company.

Nobody knows where GameStop’s stock will end up, but it may not help the company.

I, for one, don’t completely understand the stock market, but to break into the fourth wall of literacy, I would tell everyone to be careful where they place their money. GameStop is a company many people have grown to love, but if it comes time to let the ship sink, then perhaps nostalgia should be forgotten. For now, congrats to those who are making money on their investments.

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