GameStop’s meme stock is having another wild meme moment

Two Wall Street traders wearing Mario and Luigi hats watch in horror for another rollercoaster ride of meme stocks.

photo: Kotaku / Spencer Platt (Getty Images)

People have been waiting for them GameStop bubble been popping for over a year. Instead, the ailing brick-and-mortar video game retailer just had another record week on Wall Street. merits are below. morale of employees is in the pit. But shares of the company surged from $78 a share last month to over $185 in early trading today after big moves from its new technology overlord and news of its first stock split in 15 years. Physical games are dying, but Zombie GameStop keeps going thanks to the marketplace endless fondness for casino-style gambling.

So what exactly is going on? Here’s an explanation for meme stock’s renewed anger: Last week, GameStop CEO Ryan Cohen bought 100,000 more shares of the company. It was a move worth around $10 million and a signal to other investors — and Cohen’s rabid fan base in the meme-stock community — that he has big plans and full faith in the ailing retailer.

GameStop also announced this week an upcoming stock split increase the total number of available shares from 300 million to 1 billion. This move lowers the price of each individual share while keeping the value the same for all current investors. It’s something companies often do to spur short-term hype, but in the case of GameStop, it can also make it easier for random posters on Reddit and elsewhere to get in on the action.

Another explanation for why GameStop stock is on fire again is this nobody really knows what’s going on, and everyone’s just trying to catch the latest wave before it all goes broke again. Stock trading is gambling. Historically, no one beats the market, no matter how wise they play. But every lottery has a winner, and many people think it could be them.

“GameStop as a company doesn’t do anything productive,” said Kevin Mullally, a professor of finance at the University of Central Florida. said NPR yesterday. “But it’s like people are buying Pet Rocks or Beanie Babies. These things are basically worthless. It’s strange and I don’t understand it. But there are a lot of weird things people are buying that I don’t understand.”

A chart shows GameStop's volatility over the week.

screenshot: Google / Kotaku

Throughout GameStop Meme stock saga, there has always been contention as to how much of it has been driven by extreme online trolls versus large and mid-sized professional investors. But no one can deny the frenzied GameStop boosters who keep jumping on trading advice like Waterholes Wall Street Bets and recently r/GME. “Apparently more than 16% premarket isn’t good enough to report on Bloomberg‘ she reads current top post to the GameStop stock community, which, like everything else, is defined by its collective performance of mainstream market resentments. “Today is the first day in over a year that I don’t look up to the opening bell to fight!” reads another. “I’m about to have an operation. God bless Germany.”

Posters like this might not be legion enough to account for the massive swings in GameStop stock, but the pure id fueling their enthusiasm is far more compelling than the alternative, which is “it doesn’t matter, none of it matters.”

The original case for GameStop in 2020 was that the company still owns tons of real estate, the PS5 and Xbox Series X/S were about to launch, and the market undervalued them at just $5 a share. What is the case for GameStop now? There’s none, at least none, that isn’t tied to the cult of personality surrounding GameStop’s new man behind the curtain. Chewy founder Ryan Cohen. Cohen’s claim to fame was selling pet food online. Over a year later, no one has figured out how that translates to a store where most games are now purchased digitally directly through Sony, Microsoft, and Nintendo’s online stores.

Even former Nintendo of America president Reggie Fils-Aimé didn’t get it and ended up throwing himself off the GameStop meme stock train shortly after exiting the station because “there was no articulated strategy.” To the extent that strategy exists, it seems to revolve around turning GameStop into a “tech” company and Launch of a new crypto platform. A good scam fathers another.

As always, the folks left out of Cohen’s Machiavellian market moves and Reddit’s meme stock shipposting are the thousands of people working in the actual stores that deliver actual revenue. “How can we be expected to hire ‘the best talent,’ even though we pay less than White Castle for assistant managers,” says the Top post today on the GameStop contributor “Power to the profits” Reddit. Just below it says “miserable”.

In spite of golden parachutes for executives and inscrutable Wall Street rallies, store clerks routinely tell kotaku They haven’t gotten a raise in years, despite record inflation and higher rates at big department stores and supermarkets just around the corner.

“You want my opinion on the stock?” said a current assistant manager. “All you do when you buy their stock is allow their – and excuse my English – but rather shitty treatment of employees. You see that they are still making money, they will still stay on the same course.” GameStop’s meme stock is having another wild meme moment

Curtis Crabtree

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