One of the strangest stories so far in 2021 has certainly been the run on GameStop stock. Bringing together Wall Street, the gaming world, Reddit, and a whole lot of money, the surging stock over at GameStop is causing investors everywhere to take notice. With the stock skyrocketing, those that already had a stake in the company are profiting handsomely, such is the case for the CEO of the website Chewy.
GameStop has been on a downward trend recently, sales have been down, and the company has been closing retail locations to bring down costs. This is largely why there has been so much speculative action around the company’s stock. Some are convinced it will tank further, while the Reddit investors on the r/wallstreetbets thread are doing what they can to counter that. It’s created a volatile situation, but a few folks who invested in GameStop before this surge of activity stand to be the biggest winners in all of this.
After recently joining GameStop’s board of directors, pet food billionaire Ryan Cohen’s sizeable 13% stake in GameStop has sent his $75 million investment in the company up in value to a staggering $1.3 billion. The co-founder of the pet food delivery website Chewy has made an average of $90 million a day since the stock began its rise. Despite making such astronomical gains, it remains to be seen just what this will mean for GameStop, and what Cohen will do as a board member.
It is undeniable that GameStop needs to restructure some elements of its business. Cohen has previously said that GameStop needs to close many of its retail locations in favor of an online approach. After making this suggestion, Cohen was brought on to the board of directors, a sign perhaps that the company is looking to take Cohen’s advice on the matter.
This huge run on GameStop seems to be inspiring similar action on Wall Street, with AMC theaters seeing a similar surge in stock price. Following a similar downward trajectory to GameStop, AMC has been in a bit of trouble for some time, with investors banking on the stock tanking further. The same Redditors who took to GameStop seem to be shifting their focus to AMC now, in an effort to stick it to more hedge fund managers.
The whole situation is pretty wild, and it clouds the picture on just what GameStop should do to right the ship. Usually, a boost to stock price is an indication that a company is doing well, but that’s just not the case here. A few people are getting rich, but this rush on stocks could still be bad news for the troubled game store.
Source: CNBC
![\"IT電腦補習](\"http://itteacheritfreelance.hk/test/wordpress/wp-content/uploads/2016/05/logo2-2.png\"){kind=logo}
www.itsec.hk
www.itsec.vip
www.itseceu.uk
Leave a Reply