More than a year ago, something unusual happened on Wall Street. A stock that looked like it had no future made an epic comeback, the likes of which had never been seen before on the stock market. But what does Reddit and GameStop have to do with it?
In Picture: A GameStop store; Image: Getty Images
The GameStop share hardly had any success on Wall Street. It experienced its peak in 2008 at a price of 61.45 US dollars. In 2014, the stock experienced another boom before it steadily followed suit. In 2020, one share was worth about four dollars. Short positions on the stock market were at over 140 percent. That means Wall Street was making money when the stock went down. But when 2021 started, everything changed drastically.
Reddit's Influence
Keith Gill saw great potential in GameStop very early on, analyzing remarkable statistics. Many believe that more and more video games are being purchased online. However, this turned out to be false and the shift to online purchases is happening much slower than people think. He shared his knowledge on a Reddit forum called WallStreetBets (WSB for short). In this forum, users can discuss their stock and options trades. Under the name "DeepFuckingValue", he posted there that he owned 50,000 shares, some of which he bought in June 2019 for five dollars per share. In the end, he had bought more shares. The number extended to a total of 200,000.
His purchases got coverage on the forum. His posts on the forum WSB never got below 10,000 upvotes. Within just a few days, the posts got upvotes of over 130'000 and subsequently over 200'000. People became more attentive than ever and bought GameStop stock (short: $GME) diligently, causing the price to rise to over $325 per share. Short positions from the exchanges and banks fell to zero.
$GME Today
However, the stock fell from 325 dollars to a hundred dollars within a few days of the high. Since then, the stock has had very strong fluctuations, trading at $86 on March 16, 2022. Keith Gill, or "DeepFuckingValue", made his last post on April 16, 2021 with the supertitle "GME YOLO update - Apr 16 2021 - final update". Apparently he sold his shares, however we have not found any SEC filings with the name "Keith Gill".
