As recently as December, GameStop's stock was bobbing along at $15, and no one expected its price to increase twenty-fold less than a month later. But after some small investors secured heaps of securities of the US company, a spiral emerged that knows only one way - upwards. The collusion on Reddit sparked a huge hype around the Gamestop stock and users talk about uniting against hedge funds and the "revenge of the little man". The goal of the Reddit community is to push big investors out of the market and get back at the "rich" on Wall Street. So while hedge funds bet on the company's falling share price, thousands of small investors banded together on the Internet and declared war on the brokers.
Trade Republic suspends trading in GameStop stock and backs down after shitstorm
"Due to the risks associated with the extreme price fluctuations, we are temporarily blocking GameStop, AMC Entertainment, BlackBerry, Nokia, Express Inc. as well as Bed Bath & Beyond from further purchases." Got to read German investors on Thursday when working with German broker Trade Republic. After the announcement, a gigantic shitstorm arose in social media, especially on Twitter. There, a number of streamers and celebrities joined in, expressing outrage that free trading is being manipulated and, even if there are risks, restricted. Among others, presenter Jan Böhmermann and YouTuber/streamer Gronkh spoke out with unequivocal statements. So after the displeasure spread on Twitter, Trade Republic went on record in a tweet on Friday morning that the trading restrictions for the aforementioned stocks are once again unrestricted.
White House weighs in - AOC announces roundtable discussion on Twitch
A spokeswoman for U.S. President Joe Biden recently let it be known in a statement that Treasury Secretary Janet Yellen is keeping a close eye on the GameStop issue and that developments are being closely monitored by the White House. Apparently, the crazy goings-on have also caught the attention of popular Democrat Alexandria Ocasio-Cortez. Via Twitter, she announced that she will broadcast a live discussion on Twitch this evening.
GameStop's history resembles a roller coaster ride
In the early 2000s, GameStop was able to acquire game retailer EB Games for $1.44 billion and went on to significant economic growth. Through its buy-and-sell approach to brick-and-mortar retail, GameStop made huge profits and was considered the largest retailer of computer games. There are now GameStop stores all over the world, but what was once considered a place of pilgrimage for gamers and nerds became the laughing stock of the community over the next 10 years due to questionable sales models. From 2016 to 2019, the company was forced to close hundreds of stores due to a lack of sales, which eventually resulted in a measly stock market value. By early 2020, after another $400 million loss, GameStop stock was worth just $4, and the COVID-19 pandemic seemed to be the final nail in the coffin's lid.