In most of the country, GameStop is just a store to buy video games.
On Wall Street, however,
it has become a battlefield
where myriads of small investors see themselves fighting an epic battle against professional investors who in their eyes represent the stock market elite.
And the big investors seem to be losing the battle: GameStop has been making gains on Wall Street for five days with hikes ranging from 10% to 100%.
Against the forecast of professional investment firms who bet the money-losing retail chain's shares would plummet,
shares rose as high as $ 380 this Wednesday morning
, after
falling
below $ 18 a few weeks ago.
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Nov. 7, 202000: 27
This anomaly in the financial market is due to a group of small investors who have gathered online, on social networks such as Reddit, among other channels, to push the store's shares higher.
There is no specific reason why this group of people was attracted to GameStop, but their comments on social networks suggest that there is some revenge against
Wall Street and the idea that it represents the richest 1% of the population of the world. country
.
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"We have the power in this situation, no one else will have it as long as we stay strong!" One user wrote in a discussion on Reddit.
"Hedge fund owners are crying because of us
,
"
the same person wrote of the GameStop stock.
While another user said: "buy and hold, we will be victorious."
Citron Research is one of the top investors who gambled that the video game store's stock would fall, which was
a 100% loss for them
, according to Andrew Left, who runs Citron.
"We move on. Nothing has changed with GameStop except the price of shares," said Left, who assures that the shares will end up falling sharply.
His opinion agrees with much of the Wall Street professionals.
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Melvin Capital is also exiting GameStop, and its manager, Gabe Plotkin, told our sister network CNBC that the hedge fund was suffering a significant loss and denied rumors that the hedge fund is going to fail.
The amount of losses suffered by Citron and Melvin is unknown.
However, as of Tuesday,
overall losses had already exceeded $ 5 billion
, according to S3 Partners.
GameStop lost $ 1.6 billion in the past 12 quarters, and its shares fell for six years in a row before rebounding in 2020. Many investors have been betting that the store's shares would fall as they took on an increasingly growing industry. it goes online.
Shares began to rise when a co-founder of Chewy, the online pet supplies retailer, joined the company's board of directors.
It is believed that this person could contribute to the digital transformation of GameStop.
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Analysts at BofA Global Research on Wednesday raised their price target for GameStop from $ 1.60 to $ 10.
At noon, the stock was at $ 362
.
Chain of cinemas
AMC Entertainment Holdings Inc., the theater chain that has been affected by the pandemic, this month posted quarterly losses of more than $ 900 million.
However, it
appears that AMC has become the next battleground
in the fight between small retail investors and Wall Street.
AMC shares soared 260% at trading on Wednesday and #SaveAMC is trending on Twitter.
With information from the Associated Press
and CNBC.