Gamestop Price May/2021
Gamestop price is among the most talked about trends in recent days. GameStop and its shares are among the most popular topics of recent days. When stock markets and stocks are involved, issues like this become difficult for many of us to understand. However, the subject is worth a close examination in terms of its importance. In addition, it seems very likely that the event will continue to shake social media for a longer period of time. For this reason, we have tried to explain the important points for you without neglecting but without much confusion
GameStop is actually a US based game chain. The main product group of the retail chain, which has more than 5,500 stores in the USA, Canada, New Zealand, Australia and European countries, is consoles; console games; PC games and various game accessories. GameStop was having a hard time due to the pandemic and was slowly closing its stores.
So What Do All These Stock Events Mean?
As we just said, GameStop was actually a company that was going through difficult times financially. Hence, the stock market value was low and share prices were very low. In such cases, some hedge funds lease the shares they think will decrease even more from their owners for a certain fee. This method, called “Short Stock” or “Short Position”, is a long-used investment strategy. After that, investors who follow this strategy sell these leased shares at a certain price.
When the price of the share decreases after the sale, they buy back the shares they sold. Finally, they return the shares they bought back at this low price to their original leased owner. The price difference between this sell and buyback is also the profits.
Isn’t it a bit complicated? For example, let’s assume that a firm buys X shares worth $ 10 with a lease price of $ 1. Then he sold it to another investor, again for $ 10. When the value of the share drops to $ 5, it gets it back. As you can see, our investor has a profit of $ 4 from his account of $ 10 $ 5 $ 1. This is what the Melvin Capital company, which makes GameStop shares short stock, also tried to do. With this method, Melvin Capital’s earnings, which have been profiting from GameStop shares for years, took a completely different dimension when users on Reddit noticed the event …
As we said, the “Short Stock” strategy is based entirely on low stock price. In order for the investor implementing this strategy to make a profit, the price of the purchased stock must be in a continuous decrease. This is where Reddit users step in. Members of the “r / WallStreetBets” forum on Reddit suddenly started buying large amounts of GameStop shares. This situation caused the share value of GameStop to multiply. As a result, “Short Stock” investors, who had to repurchase the shares they sold to return to their original owner, suffered billions of dollars in losses. Some even had to declare bankruptcy.
The current Gamestop price is 149.00 USD. 1 GME / USD = 149.00. The crypto currency Gamestop icon is shown as GME.
GameStop CEO George Sherman recently announced that he would leave his post. GameStop CEO George Sherman said he would quit on July 31st. This may positively affect the price increase.
Sherman, who previously worked at Best Buy, had reduced his salary by 50 percent due to the Covid-19 outbreak to help the company recover from the difficult process.
The company’s shares, which were at the center of a Reddit-sourced trading frenzy, rose 9 percent after GameStop announced that Sherman would resign on or before July 31 and began looking for a successor. It is rumored that Gamestop price will increase even more in the near future.
Note: It is not intended to be investment advice.