What Happened With GameStop Stock? When Did GameStop Stock Rise?
by Aishwarya R | Updated Sep 26, 2023
What Happened With GameStop Stock?
Keith Gill, a former financial analyst, invested approximately $53,000 of his own money into GameStop (GME) stock in 2019 when it was trading at around $5 per share. Gill gained a significant online following through platforms like YouTube and Reddit, where he openly shared his investment strategies and analysis, making the case that GameStop was undervalued by hedge funds that had shorted the stock.
GameStop's stock price experienced a dramatic surge in January 2021, reaching a peak of $483 per share. This surge was fueled by a concerted effort by retail traders, inspired in part by Gill's analysis, to raise the stock's value. It led to significant losses for some hedge funds with short positions. Gill received a congressional subpoena to testify about his involvement in the GameStop stock frenzy. During the hearing, he famously stated, "I like the stock" and emphasized that he did not manipulate the market or promote the stock for his own profit.
Gill resigned from his position at Mass Mutual in late January 2021, around the same time GameStop's stock price reached its peak. The circumstances of his resignation, whether he was given an ultimatum or not, were not publicly reported. Gill and Mass Mutual faced a lawsuit alleging that he caused significant losses for investors and violated securities laws. This lawsuit was ultimately dismissed. Gill maintained that his online presence was for educational purposes only.
In September 2021, Mass Mutual was fined $4.75 million as part of a settlement for failing to supervise Gill's trading and online activity. The Securities and Exchange Commission (SEC) later determined that no market manipulation occurred with GameStop or other meme stocks. "Dumb Money" suggests that Gill continued to hold GameStop stock as of April 2021 and even exercised call options to acquire additional shares, bringing his total share count to 200,000. The movie claims he was worth $34 million at that time, although Reuters previously valued his holdings at $48 million during the peak of the frenzy.
Following the frenzy, Gill reduced his public presence. He is no longer a registered financial broker, and his last public YouTube post was in April 2021. Reuters reported in 2022 that Gill had largely retreated from the public eye. He remains married to his wife, Caroline, portrayed by Shailene Woodley in the movie. The GameStop stock frenzy of 2021 was a unique and highly publicized event that involved retail traders challenging established financial institutions. Keith Gill's role in inspiring and participating in the frenzy made him a central figure in the narrative, with his actions and testimony sparking debates about market dynamics and regulation. The entire Keith Gill Stock war with GameStop is documented in the Dumb Money movie.
GameStop
GameStop Corp. is a prominent American video game, consumer electronics, and gaming merchandise retailer headquartered in Grapevine, Texas. It holds the distinction of being the largest video game retailer globally. Founded in Dallas in 1984 under the name Babbage's, the company later adopted the name GameStop in 1999. The company's trajectory experienced a downturn during the mid-to-late 2010s due to significant shifts in video game sales towards online platforms.
GameStop's ill-fated investments in the smartphone retail sector further exacerbated its struggles. However, the most notable chapter in GameStop's history unfolded in 2021 when retail investors took notice of the company's short interest far exceeding its float. This discovery led to an unprecedented surge in GameStop's stock price. The extraordinary volatility in GameStop's stock price during this period was not solely due to shorts covering their positions.
Instead, it was primarily driven by the substantial buying power wielded by retail investors. The resulting frenzy garnered widespread media attention throughout January and February 2021, making GameStop a focal point in financial discussions. Despite the challenges it faced, GameStop managed to secure a spot on the Fortune 500 list, ranking 521st. In addition to its extensive network of retail stores, GameStop also owns and operates Game Informer, a respected video game magazine. The company has also adapted to changing market dynamics by transitioning into e-commerce and even venturing into the world of NFTs (Non-Fungible Tokens).
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When Did GameStop Stock Rise?
GameStop's stock experienced significant rises at multiple points in time:
January 2021
The initial and most notable rise in GameStop's stock price occurred in January 2021. The stock price exploded during this month, effectively doubling in value on a daily basis, and reaching a peak of $86.88 U.S. dollars per share at the close of trading on January 27, 2021. This surge was driven by a concerted effort via social media to raise the stock's value and was intended to negatively affect professional investors who had short positions on GameStop shares.
Mid-February 2021
After the January surge, the stock price of GameStop began to fall and stabilized at around $11-13 U.S. dollars per share in mid-February. During this period, it seemed like the frenzy had subsided, and the stock had returned to a more typical trading range.
February 24, 2021
Unexpectedly, GameStop's stock price doubled again on February 24, 2021. The exact reasons for this second increase were not fully clear, but it likely involved a combination of factors, including continued interest from retail traders and speculative trading activity.
March 10, 2021
Following the February surge, GameStop's stock price continued to rise, reaching $66.25 U.S. dollars per share at the close of trading on March 10, 2021. This further increase added to the ongoing volatility and uncertainty surrounding the stock.
July 17, 2023
As of July 17, 2023, GameStop shares were trading at $22.82 U.S. dollars per share, significantly lower than the peaks witnessed in early 2021. The stock price had experienced fluctuations and had not returned to the levels seen during the January and February 2021 surges.
These fluctuations in GameStop's stock price during early 2021 were a result of the intense speculative trading activity driven by retail traders and the influence of social media. The stock's value had returned to a more stable range by mid-February, but it remained a focal point of interest and discussion in financial markets.
Rise of GameStop Stocks
The rise of GameStop stocks, as detailed in the provided information, was a highly unusual and dramatic event in the world of finance. Here's a summary of the key points that contributed to the rise of GameStop stocks:
Hedge Funds vs. Retail Investors
The initial situation involved hedge funds betting against GameStop due to the company's declining net income and the perception that it was on a trajectory similar to that of Blockbuster, which had gone bankrupt due to technological shifts. Hedge funds believed that GameStop's stock price would continue to fall.
Keith Gill and Retail Investors
Keith Gill, along with thousands of retail investors, took the opposite stance. They believed that GameStop was undervalued and saw an opportunity for the stock to rise. Gill, in particular, invested a significant portion of his own money into GameStop, effectively challenging the hedge funds' short positions.
Social Media and Online Communities
Social media platforms like Reddit, specifically the WallStreetBets subreddit, played a crucial role in mobilizing retail investors. Online communities shared their investment strategies and discussed the potential for GameStop's stock to see a turnaround.
GameStop's Remarkable Surge
GameStop's stock price experienced an unprecedented surge in January 2021. Elon Musk's tweet mentioning "Gamestonk!!" contributed to the stock price rising over $200 per share, and it closed at $347.51 per share on January 27, 2021.
Robinhood's Trading Restrictions
The rise in GameStop's stock price led to heightened volatility and trading restrictions by platforms like Robinhood. Robinhood temporarily suspended the ability for users to buy additional GameStop shares, allowing only selling. This decision caused a panic among some investors.
Sharp Stock Price Decline
As a result of the restrictions and investor panic, GameStop's stock price dropped over 80 percent in less than a week after reaching its all-time high of $483 per share. Although there were subsequent fluctuations, the stock never returned to those peak levels.
Current Stock Price (September 2023)
As of September 2023, GameStop's stock typically traded in the range of $15 to $20 per share, significantly lower than the peak in early 2021 but still higher than the all-time low of $2.57 per share in 2020.
The rise of GameStop stocks was marked by an extraordinary clash between retail investors and hedge funds, fueled by social media-driven momentum and intense market speculation. While the stock's price experienced wild fluctuations, it remained significantly elevated compared to its pre-frenzy levels, reflecting the lasting impact of the retail trader movement in the stock market.
History of GameStop
The history of GameStop is a journey that spans several decades, marked by mergers, transformations, and transitions in the video game retail industry. Here's a comprehensive overview of GameStop's history:
Babbage's (1984-1994)
NeoStar Retail Group (1994-1996)
Purchase by Leonard Riggio (1996)
Barnes & Noble Ownership (1999-2004)
This historical journey highlights GameStop's evolution from a software retailer to a major player in video game retail. The company's ability to adapt to changing market conditions and its eventual independence marked significant milestones in its history.
Expansion of GameStop
GameStop's expansion has been marked by a series of acquisitions and brand expansions, allowing the company to diversify its operations and increase its presence in various markets. Here's an overview of GameStop's expansion efforts:
GameStop acquired EB Games (formerly Electronics Boutique) for $1.44 billion in 2005. This acquisition expanded GameStop's reach into Australia, Canada, Europe, and New Zealand, adding over 4,250 stores to its worldwide operations.
GameStop acquired Rhino Video Games, which operated 70 video game stores in the Southeastern United States, from Blockbuster LLC.
In April 2008, GameStop acquired Free Record Shop's 49 Norwegian stores.
GameStop acquired Micromania, a French video game retailer, for $700 million in October 2008. This acquisition gave GameStop a significant presence in the French video game market.
GameStop acquired a majority stake in Jolt Online Gaming, an Irish browser game studio, in November 2009.
In 2010, GameStop acquired Kongregate, a San Francisco-based website for browser-based games. Kongregate was later sold in 2017 for $55 million.
GameStop acquired Spawn Labs and Impulse in separate transactions. Spawn Labs developed technology for remote gaming, while Impulse was a digital distribution and multiplayer platform. GameStop eventually shut down both PC Downloads and Spawn Labs in 2014.
GameStop acquired BuyMyTronics, an online marketplace for consumer electronics, in 2012.
GameStop acquired a 49.9% ownership interest in Simply Mac, an Apple authorized reseller and repairer based in Salt Lake City, in October 2012. GameStop later acquired the remaining 50.1% in November 2013.
In November 2013, GameStop acquired Spring Mobile, a retailer of AT&T-branded wireless services.
GameStop acquired 163 RadioShack locations in February 2015.
In July 2015, GameStop acquired Geeknet.
GameStop diversified its business by acquiring 507 AT&T store chains in August 2016.
Through these acquisitions and brand expansions, GameStop aimed to stay competitive in the evolving gaming and consumer electronics market while expanding its global footprint and diversifying its business portfolio.
GameStop Highest Stock Price
The highest GameStop stock price ever reached was $86.88 on January 27, 2021. The highest stock price GameStop reached in the past year was $34.99, which is 103.7% higher than the current price. The lowest stock price GameStop reached in the past year was $15.41, which is 10.3% lower than the current price.
What Happened with GameStop Stock - FAQs
GameStop's stock experienced significant volatility and attention in early 2021. It saw a massive surge in price driven by a social media-driven buying frenzy, primarily coordinated on Reddit's WallStreetBets forum.
GameStop's stock saw a remarkable rise in late January 2021. The most notable peak occurred on January 28, 2021, when the stock briefly reached an intraday high of around $483 per share.
The rise of GameStop stocks in early 2021 can be attributed to a unique set of circumstances. Retail investors, organized on platforms like Reddit's WallStreetBets, collectively bought GameStop shares, causing a short squeeze.
GameStop has a history that dates back to its founding in 1984 as Babbage's, a software retailer. Over the years, it evolved into a leading video game, consumer electronics, and gaming merchandise retailer.
GameStop's expansion involved a series of acquisitions and brand expansions. It acquired companies like EB Games, Micromania, and Kongregate to expand its global presence.