GameStop ‘s MemeStock is repeating itself on the Stock Market, generating a huge profit for the video game company.
As it happened months ago, GameStop is once again experiencing a growth in the value of its shares on Wall Street and it is, possibly, as a result of the people on the internet.
The shares have gone from 78 dollars each to value for 185 this same Friday and could be due to the latest movements of its new technological leader.
GameStop board chairman Ryan Cohen bought an additional 100,000 shares of the company’s stock. It was a move valued at roughly $10 million and a signal to other investors, and the fan base in the meme-stock community from Reddit , that he has big plans and full confidence in the ailing retailer.
This week, GameStop also announced an upcoming stock split to increase the total number of available shares from 300 million to 1 billion. That move lowers the price of each individual share while maintaining the same value for all current investors.
While GameStop ‘s recent highs aren’t nearly as close to last year’s surge (when its stock hovered around $400 a share at one point ), pundits have said the company’s stock price is well above what it actually is. worth the retailer.
“It’s hard to argue that the price is worth more than $80,” said Kevin Mullally, an assistant professor of finance at the University of Central Florida’s College of Business.
GameStop is a physical retail store founded in 1984 where customers buy, sell and trade video games and other gaming accessories.
“GameStop as a business, if you separate it from the stock itself, it was a dying business in a sense,” Mullally told NPR.
“About a year ago, they saw that the share price was about $20 overvalued” and started shorting the stock, Mullally said.
The short sale means that investors are betting against the company and will benefit if the value of the asset falls.
Last year, amateur day traders banded together to boost the video game retailer’s stock price. The traders, organized largely through online communities on Reddit, sought to fuel a small squeeze on the video game retailer and trigger significant losses for hedge funds.