If you’ve not yet heard about it, but read any of the business or financial news, you probably will.
(I’ll leave you to search articles from your preferred source of reliable news)
Edit: this is a good overview from the BBC
Here’s a quick (incomplete) potted history:
A US-based, listed retailer of physical games (including, in particular the physical media distribution of video games, like CD/DVD/cartridges) called GameStop was losing money and about to close a large number of stores. [No shock there]
Investors bought in and suggested it moved online to compete with Amazon. [Heard it before]
Large funds take a dim view of this strategy and ‘short sell’ the stock, betting that any recent increase will be reversed. [Once again]
An army of small retail investors object, coordinated via a Reddit board, to what they see as an attack on a brand they know / like / identify with, and see an opportunity to give the hedge funds a ‘financial black eye’ - by boosting the value of the stock so large investors lose money - quickly. [Now there’s a surprise]
It sounds more like the plot of a Hollywood movie trying to get us interested in financial stories, in the style of ‘The Big Short’, than the content of our financial pages.
However, GameStop stock values continue to rise, costing large funds and brokers a lot of money, and bringing these small investors a substantial gain (on paper) - for now.
From the outside it is interesting to observe, watching a market being ‘manipulated’ in real time.
However, it gives a dim view of the volatility and reliability of the market, and how it works, for inexperienced investors. It also is potentially risking the money of a lot of small investors who may not be fully aware of the background to the rise, and who may not be able to afford for the stock to return to previous / normal valuation levels.
On the other hand, it might represent the power of smaller investors to support those companies and brands they truly love now that they can influence this more directly via investment (trading) platforms.
In the long run, does anyone win?
What do you think?
(note, this is personal commentary on a current news story, and not advice concerning any particular stock or how and where you might invest your money. This is not a place to seek, give or solicit investment advice. If you are unsure whether investing is right for you, then you should seek the advice of a qualified investment advisor. With any investment your capital is at risk)