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TradersBest.com / GameStop: The Winners, Losers and Where it is Now

GameStop: The Winners, Losers and Where it is Now

Publish Date: 12/03/2021

We’re almost two months on from the GameStop madness that took the financial world by storm. Now that we’ve had time to reflect upon it, we take a look at who the real losers and winners were, and check out where GameStop stocks are now.

The GameStop Craze – A Reminder

For those fo you that missed it or need a swift reminder, GameStop madness was grabbing all of the headlines back in January. Its stocks were soaring as retail traders on a Reddit thread called Wall Street Bets egged each other on to buy up its stocks.

Why? Because GameStop was viewed by most in the financial sector to be heading the same way as Blockbuster Video. As a result, multiple hedge funds bought GameStop stocks with the view to short selling them. Short selling successfully relied on the stocks dropping, so these small-time retail traders decided to stick it to the man and drive the price up.

It was pitched as a David vs Goliath Story, but perhaps all wasn’t what it seemed to be…

Who Won and Lost in the End?

Some of the retail traders who were the driving force behind the GameStop surge would have you believe it was indeed a David vs Goliath story – and one that David most definitely won in the end. There are facts to support that outcome – many Hedge funds lost around 20% of their investments, equating to tens of billions of dollars, so the aim of making the billionaires lose succeeded.

That’s not the full story though, many inexperienced retail traders jumped on the bandwagon as traders on Reddit continued to spur each other on. Inevitably, the GameStop surge was over as people started selling off their shares. As a result, there were plenty of first-time retail investors who lost almost everything.

Was it Actually Goliath vs Goliath?

On the face of it, the GameStop surge does look like something that started off as a bunch of millennial nerds taking on Wall Street and getting a small win. However, many are skeptical that such a surge could’ve been caused by retail traders alone.

Retail traders only account for a quarter of the market, and have far lower investment volume. Many have therefore concluded that rival hedge funds quickly took notice and started buying up GameStop shares themselves, to make money while their competitors suffered heavy losses.

Additionally, there are YouTubers and experienced young retail traders who have admitted to jumping on the bandwagon early with the sole view of selling because the bubble burst. As is the case with every expanding bubble – when it pops there are extreme winners and losers.

And Where is GameStop Now?

It seems that this GameStop saga hasn’t actually quite been put to bed just yet. After peaking at nearly $350 a share in January, it had dropped to $40 by early February – and we thought the craze was over. That was until March, when it started hiking again, almost going back up to it’s $350 on Wednesday of this week before dropping nearly $100 in the same day!

Is there a sequel to the GameStop saga? It looks like we’re about to find out!

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