Is now the right time to buy GameStop shares?
Why is GameStop making waves again?
If you remember from January this year, you’ll know that even the most beaten-down stocks like GameStop can start soaring when a group of traders gets together on social media to pump up the price in an attempt to squeeze out the short-sellers.
GameStop is one of the “meme” stocks that has seen its share price rise on increasing interest and trading volume driven by the excitement on websites such as Reddit rather than by any change in the company’s fundamentals. Many novice traders and investors buy into these stocks’ stories simply out of fear of missing out (FOMO), and many of them have made money by doing so, if only due to beginners’ luck.
Speaking to Bloomberg, analyst Michael Pachter thinks that this latest interest is purely retail driven. “The Reddit raiders are at it again,” he says.
Where can I buy GameStop shares?
Due to the volatile nature of the so-called “meme” stocks, not all brokers allow you to bet on them by opening new positions, but we’ve found the ones that do.
To buy shares on eToro, traders will need to sign up for an account and find it on the platform. eToro is one of the world’s leading online brokers, offering access to a huge array of cryptocurrencies as well as traditional assets like stocks and commodities. It has been a stalwart of the industry for over 10 years and is one of our most trusted partners.
What is GameStop, and why is there such interest in its shares?
GameStop traces its roots back to the early 1980s, when video games and consoles became affordable and easily accessible. The company enjoyed it’s best years in the early 2000s, with the advent of the Xbox and PlayStation consoles. Since then, it has struggled to maintain its position in the face of fierce competition from online retailers and an increasing move towards cloud-based gaming. Many of its high-street stores have gone as it tries to consolidate and remain relevant in a very different market. The interest in its stock is very difficult to pin down. Few investors or analysts are expecting a dramatic turnaround in the company’s fortunes owing to its business model, so the general feeling is that it is merely a nostalgic undertaking by online investors, seeking to reinvigorate a firm that they remember fondly from their childhoods.