Tag: GameStop

GameStop (GME) gained notoriety as a "meme stock" in 2021 when retail investors, coordinating on social media platforms like Reddit, drove its share price to unprecedented heights. This phenomenon, known as a "short squeeze," caught many institutional investors off guard. GameStop recently announced plans to add Bitcoin (BTC) to its treasury reserve assets, following in the footsteps of companies like MicroStrategy.

The U.S. SEC is already looking into the GameStop scheme currently performed. The German and UK regulators BaFin and FCA, too, warned against it and similar stock schemes. On the other hand, celebrities like Elon Musk seem to endorse these new stock games driven by online boiler rooms on Reddit or Telegram and online trading platforms and apps like eToro, Robin Hood, Interactive Brokers, or Kraken. Social media-based market manipulation or the next generation trading approach, that's the question. Anyway, it's scammers' paradise.

Somehow, you could almost have bet on it. In the last two days, the pump-and-dump scheme of Reddit forum WallStreetBets (WBS) has shot up NYSE-listed GameStop's stock from somewhere around $5 to over $400 in some cases. A combined effort of several million investors coordinated through the Reddit forum. The fellows see themselves as heroes who can win against Wall Street's short-sellers. Today, bitcoin (BTC) is following that pattern, shooting up from under $33,000 to nearly $38,000 within an hour on super-high volume. The pump is still on. The crash will follow like GameStop.

GameStop, a rather old-fashioned company that sells physical copies of video games in shops in dying malls, is currently the hottest stock in the United States, a “meme stock.” The GameStop microstock listed on the NYSE is at the center of small investors' battle organizing via Reddit against institutional Wall Street short-sellers. The share price jumped from $4 last summer to $20 at the end of 2020, to $40 two weeks ago. At the time of publishing, it is worth $126, resulting in a market capitalization of more than $8B. Already down from $400 and $28B, respectively.