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| GameStop |
'Amateur Investors' pour money into Gamestop Stock in January 2021
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| Elon Musk tweets Gamestonk!! |
GameStop Corp (GME) shares have increased 1,625% since the beginning of January 2021. Many analysts call the people behind this phenomenon 'amateur investors' because they seemingly have been influenced by online forums, such as WallStreetBets forum on Reddit, or possibly influenced by tweets by Elon Musk, such as the infamous 'Gamestonk' tweet on January 26, 2021. Elon Musk's tweet links to the WallStreetBets forum on Reddit. The reasoning behind the surge in GameStop's stock price is from a concerted effort outlined or encouraged by the WallStreetBets forum on Reddit. Their rationale was that the Hedge fund managers were doing shady things, such as shorting the GameStop stock because they knew it was going to fall in price. When "amateur investors" bought into the GameStock stock, and the increase in price caused a major problem for hedge funds that shorted the stock. They had to then buy more of their short position to avoid losing money, but ultimately still ended up losing money in the effort because the stock price has soared toward the end of January 2021.
Many experts are saying that regardless of the massive trend to invest into GameStop will end badly for amateur investors because the stock price is expected to fall back down to under $20.
Billionaire investor Leon Cooperman said to CNBC on Thursday: "GameStop is not worth $500, not worth $400, not worth $300, not worth $200, not even worth $100, not even worth $50...I'm not damning them. I'm just saying from my experience, this will end in tears."
Editor's Note: I personally believe that any person should have the right to invest into any stock they want, regardless of their reasons, and I support their freedom to buy into any stock they choose. Everyone that gets into investing has the right to do this, and to take stock advice from anyone they choose, even if it comes from the WallStreetBets forum on Reddit. I also do not hold any GameStop (GME) stock.
Wall Street is Amazed at the Stock Market 'Bubble'
Many analysts continue to throw around the idea that we are experiencing and seeing a bubble - a term that means we are seeing unexpected things, (i.e. due to more people having money to invest from the U.S. stimulus payments). But the idea that we are in a bubble has been tossed around much in recent times. Does anyone ever really know if we are in a bubble?
Sources:
Randall, David. "Analysis: A tulip by another name? 'Gamestonk' and the case for investor caution." Reuters. Article URL: https://www.reuters.com/article/us-retail-trading-bubbles-analysis-idUSKBN29Z0HG
