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So where has GameStop been and why has it come out with an NFT?
It looks like GameStop is on the rise again, with the company seeing a massive surge in price as it announces that it’s investing in NFTs.
So where has GameStop been and why has it come out with an NFT?
It looks like GameStop is on the rise again, with the company seeing a massive surge in price as it announces that it’s investing in NFTs.
GameStop’s stock has been skyrocketing over the last several days, indicating another short squeeze similar to the one in January, which saw the retail outlet share price skyrocket as it was the middle man in a battle between retail investors and Wall Street hedge funds.
On Wednesday, US time, the online retailer fuelled further speculation about its intentions on going all-in on nonfungible tokens, or NFTs, as it launched a new website.
The GameStop NFT website is fairly sparse. It shows an illustration of a Nintendo Game Boy-type device with a simple statement on the screen saying: “Power to the players. Power to the creators. Power to the collectors.”
While the website has a simple catch-phrase and an ‘apply here to be part of the team’ message, investors were buoyed by the announcement.
The sparse message of what exactly the company is doing did not stop the share price shooting up 17 per cent, ending the Wednesday night’s trading (Thursday our time) at US$242.56.
Shares of GameStop and other companies popular on forums such as Reddit’s WallStreetBets have been climbing in recent weeks and the rally accelerated on Tuesday. GameStop is now 70 per cent above its closing low for May, while AMC has risen 95 per cent in the month-to-date.
The short squeeze has effectively cost short-sellers in GameStop US$6.7 billion in year-to-date mark-to-market losses, including $339 million from Tuesday’s more than 16 per cent gain and about $383 million due to Wednesday’s move, S3 data on Twitter showed.
A 17 per cent rally in GameStop and a near 19 per cent rally for AMC in the last 24 hours alone has cost short-sellers US$673 million.
Celebrated on Reddit’s WallStreetBets, comments include: “[T]hey shouldn’t invest money they can’t afford to lose”; one user said to another: “I told my coworker that I will probably have a nice little fortune in the near future. She asked me, what are you going to do, are you robbing a bank? I said, yeah, indeed. Which one? You could say I am going to rob all of them. Damn it feels good to be a gangster.”
The current market rally is reminiscent of the short squeeze in January, which saw the price surge to a high of US$350 a share, the price has shot up over $100 since 10 May.
However, the last short squeeze saw the price of GameStop plummet when the actual earnings of the business were released.
GameStop’s next earrings will be released on 8 June in the US, which could see the price of the share fall again.
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