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Real business:
Gamestop store in Des Plaines, Illinois
Photo: Nam Y. Huh / AP
The latest business figures for US video game retailer Gamestop were actually hardly likely to send investors into euphoria.
In view of the corona restrictions, there was a strong increase in online sales.
Overall, however, at the beginning of January, Gamestop published a 3 percent drop in sales for the Christmas business compared to the same period last year to almost 1.8 billion dollars, also due to the lockdown measures that are restricting retail in many places.
The company, which is headquartered in the US state of Texas, operates around 5,000 stores worldwide in addition to online trading.
The development of the Gamestop share price must appear all the more strange to outsiders.
The paper spent most of 2020 well below the ten dollar mark.
In the autumn of last year, the course started to move - and it has literally exploded since the beginning of 2021.
While a Gamestop share cost less than $ 20 at the beginning of the year, it's now around $ 148.
An increase of 640 percent within four weeks - such dimensions are otherwise known at best from the market for crypto currencies such as Bitcoins.
What's behind it?
Gamestop has become a plaything for speculators.
On the one hand, there are various hedge funds that have identified paper as an object for short sales because they believed that prices would fall.
And on the other hand, there is a large number of small investors.
They exchange information on social media such as the US platform Reddit and thus agree to drive up the price of the paper - and make the hedge funds look old.
Elon Musk is also involved
Most recently, the Gamestop share price received an additional push when Tesla boss
Elon Musk
(49) got involved in the action.
Musk posted a link to a Reddit thread about Gamestop on the short message service Twitter.
The company's value has now passed the $ 10 billion mark.
The small investors have already achieved success with their campaign.
The hedge funds Melvin Capital and Citron reportedly got into serious trouble with Gamestop's continued appreciation.
The investment houses Citadel and Point72 had to help Melvin Capital at the start of the week with $ 2.75 billion in order to prevent a collapse of the competitor, writes the "Wall Street Journal".
According to the newspaper, Melvin gambled away with Gamestop shares, among other things.
Stockbrokers suspect that Citron burned his fingers in a similar way.
Last week, the shortseller expressed doubts about the business model of the video game retailer, which was in a tailspin due to the pandemic, and predicted a rapid drop in the rate to $ 20.
The hedge fund could not be reached for comment on the latest price development at Gamestop.
The problem of hedge funds, which bet on price declines: If these do not materialize, the investment houses have to cover their positions at some point and buy stocks for this purpose, because they are then under time pressure at almost every imaginable price.
This can lead to a so-called short squeeze, in which a share price can shoot straight up for a short time.
A scenario that Gamestop may already have at the moment.
The extreme case was the Volkswagen ordinary share in autumn 2008 in the course of the takeover of Porsche.
Back then, hedge funds that had bet on falling prices were caught off guard.
There were hardly any shares left to buy, and the price briefly shot over 1000 euros.
Gamestop is just one example - Varta and Evotec also have a strong impact
"Numerous investors were betting on the share price decline when it became a hot topic on social media," says Jaske Wujastyk, chief market analyst for TrendSpider, a provider of analysis software for investors.
The subsequent price increase caught them on the wrong foot.
You would then have had to resolve these bets to minimize your losses - a "short squeeze" as it is in the book.
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The video game dealer is just one example of several.
Observers see a trend in the financial market in the opposition of hedge funds and small investors who organize themselves via social media.
The latest example is Gamestop, says analyst Jochen Stanzl from the online broker CMC Markets.
On a smaller scale, however, the method is also behind the recent price gains of the battery manufacturer Varta, say stockbrokers.
The current bull market of the Finnish network equipment supplier Nokia is also due to such meetings in internet forums.
In Germany, the stocks of the biotech company Evotec were also strongly moved: After almost double-digit price gains at the beginning of trading, they had meanwhile shot up by a further 30 percent.
It is believed that this is also due to short sellers who had to stock up on stocks after the recent price gains in order to limit losses when betting on falling prices.
Hugo Boss climbed 12 percent in this context.
Lufthansa papers gained almost 7 percent.
Small investors against stock market professionals
"It's hilarious that retail investors are mocking Wall Street and seasoned institutional investors," said Rob Paone, founder of Proof of Talent recruiter, who specializes in careers in the cryptocurrency and blockchain industries.
Art Hogan, chief investment strategist at asset manager National Securities, has a similar view.
"You know it won't end well. But while it happens, people sit and watch, fascinated."
At the same time, so-called "memes" were circulating on the Internet in which small investors, for example, make fun of the losses of institutional investors with photomontages.
Because "normal Otto investors" are reviled as "stupid money" by stock market professionals who occasionally refer to themselves as "Masters of the Universe".
cr / Reuters
