|
Because it was a HUGELY false tell -
The stock market is intended to be indicative of the profitiablily of a business and i'ts viability as a long term investment..
here's the thing.... Gamestop's business (in person and online) has been DECLINING in revenue - most people DOWNLOAD their video games nowdays... or play online -based video games... They have what's referred to as a dying business model - much like Blockbuster 15 years ago...
If their business - both retail AND online - are steadily declining - to the point where they're closing stores left and right because they can't afford the overhead. Those would be things that would most definitely drive the stock DOWN - from the $17 it was at.....
Instead, some influencers (ja rule and Elon Musk - yes REALLY) decided to pump up JUST the stock aspect of Gamestop hard and fast (no actual increase in business was experienced by Gamestop) - and the hype drove demand for the stock alone up from $17 to $497 overnight - which is obviously not reflecting the actual value of the company's stock.. And it was seen as a Risk management move because any time now regulators are going to pinpoint the way in which they can identify the sudden turbulence as triggered by fraud of some sort - and I have a feeling a lot of people aren't going to get to hold on to their windfalls for very long
|