The struggling GameStop, video game retailer’s stock has been making stupefying moves this month, wild enough to raise concerns from professional investors on Wall Street to the hallways of regulators and the White House in Washington.
It hit new heights Thursday when several trading platforms limited their customers from making certain trades with GameStop. The actions sparked more volatility in the market and an outcry from users of the platforms and some members of Congress who say small investors are being treated unfairly.
GameStop stock has rocketed from below $20 earlier this month to close around $350 Wednesday as a volunteer army of investors on social media challenged big institutions who had placed market bets that the stock would fall.
It has been maniacal this month. After sitting around US$18 three Fridays ago, it doubled in four days. It kept shooting higher, before nearly doubling on Tuesday and then more than doubling again on Wednesday to US$347.51. On Thursday, it gave back a chunk of those gains and finished the day at US$193.60, down 44 per cent. But it is still up an amazing 928 per cent through the first few weeks of 2021.
GameStop, based in Grapevine, Texas, sells video games at more than 5,000 stores, and the pandemic has been keeping customers away. Over the long term, a stock’s price tends to track with the company’s profits, and GameStop’s prospects for earnings remain cloudy. Many Wall Street analysts have price targets for GameStop at US$15 or below.
