GameStop Rises and Falls in One Day, Revolutionizing the Market Once Again

History of GameStop It’s not finished yet. Its volatility continues to fill rivers of ink in the trade press, with people and outsiders trying to find explanations for its behavior in the stock market. Erratic behavior at times and it saw it rise over 100% yesterday, touching $67 from $15, then falling again to get back to around $20.

The rally began this Monday with the market opening, when early trading on Wall Street saw an increase of almost 50% (up 47.96%). This sudden change in position also occurred after influencer known as “Roaring Kitty” and who responds to Keith Gill’s name posted on a forum-based social network (Reddit) that he owns $116 million worth of company stock. GameStop and, in addition, almost 70 million options contracts on the company at 20 dollars.

The stock has continued to rise since its opening, reappearing on trade covers and stock market programs around the world. They flew until they reached 100% magnification only to fall back down.

On the social network Twitter (now caused GameStop to rally three weeks ago, and the stock more than doubled in May alone.: At the time, Gill only posted a photo of a man sitting in a chair, leaning forward.

The story of how Jill and the Reddit community upended Wall Street during the pandemic was brought to the big screen last year in the filmDumb money.

The investor is a former Massachusetts Mutual Life Insurance marketer who gained popularity in 2021 through YouTube videos and Reddit posts. The shares of companies promoted by Gill became so popular that Robinhood had to restrict trading in them, and there were even a series of congressional hearings on the issue. Two weeks ago, an independent candidate in the presidential election Robert F. Kennedy Jr. Invested $24,000 in GameStop to Gain Popularity.

The truth about GameStop

However, the rhetoric about GameStop and the legend that the company tried to plot on social media against large companies is lame. At Libre Mercado we have already explained, with the help of a great expert in this company, to the investor Edgar Fernandez, Advisor at Tercio Capitalwho knew how to see the potential of a company, as well as the market inefficiencies that brought it into the spotlight of the world.

The company’s history stems from the market believing that in the era of digital and e-commerce, the physical video game store was doomed to disappear. It is for this reason that so many major market players took a short position in the company (betting on its collapse and bankruptcy).

However, as he told us Edgar Fernandez in the free market in early 2021, GameStop had a lot of potential because the behavior of customers and video game users goes far beyond buying products through Amazon, and they tend to go to physical stores for the user experience and because they take advantage of the opportunity , to buy another series of parallel products such as posters, dolls, toys, etc. in addition to the video game. All this, as well as the large profitability of the business that this line leaves, made this company very attractive, and Edgar Fernandez was one of those who believed that sooner or later the market would agree with GameStop.