ÌÇÐÄÆƽâ°æ

In January 2021, GameStop Corporation's stock price experienced an unprecedented surge, driven by coordinated buying efforts on social media platforms, particularly Reddit. The stock price increased from 4.82 U.S. dollars per share on December 30, 2020, to 86.88 dollars on January 27, 2021, representing an increase of 134 percent in a single day. The campaign aimed to pressure institutional investors who had bet against the company through short selling, causing significant losses estimated at around 20 billion U.S. dollars. After the initial surge, GameStop's share price declined and stabilized around 13 dollars in mid-February 2021, before rising again to over 66 USD on March 10, 2021. By July 29, 2026, the stock was trading at approximately 21.84 U.S. dollars per share.

Who are GameStop?

GameStop are a retailer of video games and associated merchandise headquartered in a suburbs of Dallas, Texas, but with stores throughout North America, Europe, Australia and New Zealand. As of February 2020 the group maintained just over 5,500 stores, variously under the GameStop, EB Games, ThinkGeek, and Micromania-Zing brands. The company's main revenue source in 2020 was hardware and accessories - a change from 2019, when software sales were the main source of revenue. While the company saw success in the decade up to 2016 (owing to the constant growth of the video game industry), GameStop experienced declining sales since because consumers increasingly purchased video games digitally. It is this continual decline, combined with the effect of the global coronavirus pandemic on traditional retail outlets, that led many institutional investors to see GameStop as a good opportunity for short selling.

What is short selling?

Short selling is where an investor effectively bets on a the price of a financial asset falling. To do this, an investor borrows shares (or some other asset) via an agreement that the same number of shares be returned at a future date. They can then sell the borrowed shares, and purchase the same number back once the price has fallen to make a profit. Obviously, this strategy only works when the share price does fall – otherwise the borrowed stocks need to be repurchased at a higher price, causing a loss. In the case of GameStop, a deliberate campaign was arranged via social media (particularly Reddit) for individuals to purchase GameStop shares, thus driving the price higher. As a result, some estimates place the loss to institutional investors in January 2021 alone at around 20 billion U.S. dollars. However, once many of these investors had 'closed out' their position by returning the shares they borrowed, demand for GameStop stock fell, leading to the price reduction seen early in early February. A similar dynamic was seen at the same time with the share price of U.S. cinema operator AMC.