New York (AFP)
After shaking the world of finance at the end of January due to a frenzy of speculative buying, the video game store chain GameStop is once again talking about it on Wall Street.
The stock took off more than 100% on Wednesday and climbed nearly 65% on Thursday, extreme volatility which led the stock operator to temporarily suspend it.
Spotlight on the new episode of this stock market saga, which fascinates beyond financial circles as some want to see the opposition between the little people and the finance barons.
- Why this new flight?
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GameStop's surge, listed on Nasdaq under the symbol GME, began the day after news of the resignation of its chief financial officer, Jim Bell, who will officially step down on March 26.
This decision is not motivated by "a disagreement with the company on any subject relating to the activities, regulations or practices of the company", assured GameStop in a document sent to the US stock market policeman.
However, according to the Business Insider site, which quotes anonymous sources familiar with the matter, Mr. Bell was "fired" by businessman Ryan Cohen, who recently entered the capital and the board of directors of the firm.
Mr. Cohen has a reputation for pushing the executives of companies in which he is a shareholder into practice with recipes he believes will set the company on the path to success.
Beyond the departure of the financial manager, there is no real new information justifying the new outbreak of the GameStop title.
The acquisition of a stake in GameStop by Mr. Cohen, co-founder of online animal products store Chewy, was one of the triggers for the company's sharp rise in the stock market in late January.
In the wake of GameStop, other actions particularly appreciated by small carriers, often qualified as "same stocks" or popular actions on internet forums, took advantage of the new speculative wave.
This was particularly the case with the manufacturer of headphones Koss (+ 58%) or the cinema chain AMC (+ 13%).
- What happened in January? -
At the end of January, an army of amateur investors, notably exchanging their advice and opinions on a popular forum on the Reddit site, had decided to go massively to GameStop, raising its price on the stock market.
By acting in this way, these stock marketers had in particular wanted to prove wrong to large investment funds and the barons of Wall Street, who had on the contrary bet on a collapse of GameStop, in view of its mediocre financial results, its economic model visibly outdated and its gloomy growth prospects.
Subsequent analysis showed that the GameStop epic was not only akin to a fight between David (the small carriers) and Goliath (the hedge funds) and that other big funds had also sought to profit from it.
The "fight" had moved on television sets and in Congress where the various protagonists were put on the grill.
Parliamentarians are looking to see if hedge funds and retail brokerage platforms, like Robinhood, have attempted to manipulate the market to limit losses for professional financiers.
On Wednesday, investor Charlie Munger, famous business partner of billionaire Warren Buffett, lamented the mentality of pouncing on trending titles in droves, likening the attitude to horse betting.
He scratched Robinhood on the way.
- Can the increase last?
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After peaking at over $ 347 on January 27, GameStop action fell back to around $ 40 last Friday.
It was trading at around $ 151 on Thursday.
In view of these sharp movements, it is difficult to know if the stock will hold up, rise or even exceed its price last month or collapse.
On Reddit, the members of the WallStreetBets forum were in any case determined to do everything to support the action.
“I feel like the people who have been keeping GME for the past month are stranded on top of Everest and we have built a rescue helicopter out of tin foil and used auto parts,” wrote a user using the pseudonym Healthy_Mammooth_1066.
"Hang on, diamond hands (Reddit jargon expression to qualify an investor determined to take a position despite the risks, note). Help is coming."
© 2021 AFP