A group of Reddit users came together to buy shares in the GameStop video game store. As a consequence, on Monday (25), the company had a 144% increase in the Stock Exchange. The mass action, organized by a subreddit called Wall Street Bets, surprised veteran analysts, who predicted a drop in the store’s value.
With the covid-19 pandemic and the intensification of e-commerce, the company with physical stores was affected, presenting a low potential for investors. With negative forecasts, many of them decided to sell their shares, which at the beginning of the year were quoted at $ 17. However, after the Wall Street Bets initiative, the value rose to $ 160 on Monday.
Due to the strong rise of GameStop, the New York Stock Exchange froze its trading up to nine times before the stock fell and closed the day at $ 77. “The Wall Street Bets is taking down Wall Street on its own,” wrote one of the sub-forum users In his publication, he attached a story that reported the loss of $ 1.6 billion of those who sold the shares – all in a single trading session.
Specialist indicates change in the Financial Market
“What happened to GameStop’s action is a reminder of how times are changing. There is a new army of traders, who are not experts in valuations, but in opportunities for momentum. You see that in the Wall Street bets of Reddit, Youtubers, TikTok or Robinhood ”, explained analyst Ed Moya, from the company Oanda.
This is not the first time that a movement has defied the expectations of analysts: this has already happened with other companies, such as AMC (chain of cinemas), Blackberry and the retailer Bed Bath & Beyond. But we don’t have to go that far to find a good example.
A few days ago, amid the controversy surrounding WhatsApp and its new security policy, Elon Musk recommended on Twitter the use of the Signal messaging app. Shortly thereafter, the application registered an increase in the number of users. Interestingly, the Signal Advance action (which has nothing to do with the app) also benefited, reaching a peak of 1,100% two days after publication.