The GameStop Saga, Simplified

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The GameStop Saga, Simplified
    Stuff is going down in Wall Street. I don't know much about the stock market accept the basics. So after a balloon of notifications and friends asking me to write either about GameStop or The Myanmar Coup. To be on the safe side, I decided to be the less controversial guy and back down. Let's talk about GameStop. This article is a quick one as this is a developing situation, trust me somethings gonna happened.

GameStop's Rise and Fall and Rise and Fall.
    GameStop! It's an interesting company. Looking at share price data, over the last 5 years, GameStop was for the lack of a better term, doomed. In the beginning of 2017, it's stock price was at $25.41 USD, in the beginning of 2020, it's stock price was at an embarrassing $5.88 USD. In short, it was not doing good. Why? Well that's because of the downward spiral of malls. In different parts of the United States and even the World. Malls are in a downward spiral as the trend of doing shopping online is shooting like never before. GameStop is usually found in malls. So Malls = Bad and since GameStop is in Malls, Gamestop = Bad. (Quick Maths).
    So how did a company's stock price balloon. Well the answer is an easy one. Before we begin, let's address the elephant in the article. Hedge Funds. Hedge Funds are most prominent in failing business. They buy stocks at an high rate only to sell them at a low price for a high profit. That's why for the last few years GameStop stocks have been steadily decreasing. Now let's get to the nitty gritty of the GameStop Saga. 

Return of The Reddit and The Media
    Reddit! A social media website that I use but never posts. Although it is a great website, check it out. Reddit is the combined word of something like "Read-It". Reddit is filled with different communities such as r/Minecraft, r/hellointernet, r/vexillology but the one of focus is the now infamous r/wallstreetbets. This Reddit community is filled with users who like to monitor the stock exchange. Let's not talk more about them.

    With GameStop, the r/wallstreetbets community were clearly not too happy with the amount of hedge funds pouring with GameStop. So on January 27, when the stock exchange opened, GameStop stocks went from a laughable $4 to around $320. Hedge Fund companies were in panic as their precious stock imploded. So what was r/wallstreetbets' motive. The answer can be found in the world's wealthiest person's own Twitter.

Elon Musk and The Tweet of Insanity
    Twitter! The social media website that seems to be under the spotlight in recent months. Elon Musk tweeted that he had bought GameStop stocks. Seemingly, the Reddit community took note. In a 'If we go down then we go down together' move, r/wallstreetbets cashed in. And so began Wall Street's biggest yet most unexpected news of all time. Let's do the timeline of the sequence of events.

The Resistance and The Final Order
    After that sudden shoot in GameStop stocks, Robin Hood, a stock market company that allows everyday people to enter the stock market, halted the buying and selling of GameStop stocks. So on January 28, when the market opened again, GameStop stocks began to fall as everyday users couldn't cash into the company's stocks. While on the other side of the world was Melvin Capitol. This abomination of a company had purchased huge amounts of hedge funds and in the snap of a finger, lost huge amounts of its company and became unprofitable. Thankfully, as part of a resistance move, another company called Citadel helped Melvin Capitol so that they would not go under or 'bankrupt'. GameStop share price was dropped down to $193 USD. But on the 29th of January, r/wallstreetbets unleashed its final order. GameStop stock price bursted and shot to $325 USD again again. 

Farren's Opinion Corner
    After a complete saga, the GameStop stocks have finally fell slowly back to its original value. As of writing this article, it is the 3rd of February and GameStop prices have fallen to around $90. This timeline of events shows just how much the social media world can influence the population. One Reddit community and one wealthy individual can cause a global sensation and affect stock prices and others. On the controversial matter of hedge funds, I have no views on it but to instead say I am 'neutral' on the issue. I don't really have much of an opinion on it and I know some people are really against it. Although something should be done about the control the internet has on reality. Some boundary or line needs to be drawn. 

    I know I sound a little harsh but imagine if this happens to a bigger larger company with a bigger influence on the world like Google or Facebook or Apple. If such commotion happens, some people may lose jobs and lose a bunch of money, this may have a knock-off effect and maybe, just maybe this might kick off another global panic. GameStop to me is just a warning, a warning sign.

    To all that were involved. I apologise for such harsh comments at the end. 


Happy Reading!


GameStop Stock Market Page: https://tinyurl.com/GameStopSaga





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