Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Inside a GameStop store people line up to purchase a Sony PS5 gaming console in New York City on Nov. 12.

CARLO ALLEGRI/Reuters

A head-scratching David and Goliath story is playing out on Wall Street over the stock price of a money-losing videogame retailer.

An army of smaller-pocketed, optimistic investors is throwing dollars and buy orders at the stock of GameStop — in direct opposition to a group of wealthy investors who are counting on the stock price to plunge.

The resulting action is wild, with GameStop’s stock soaring nearly 145% in less than two hours Monday morning, only for the gains to disappear quickly afterward.

Story continues below advertisement

The struggling company has lost $1.6 billion over the last 12 quarters, and its stock fell for six straight years before rebounding in 2020. So, it might seem like a strange place for the locus of so much movement. But GameStop has been a target of many professional investors, who say the company will continue to founder as sales of games continue to go online.

These investors have been betting that GameStop’s stock will fall. They “shorted” the stock, which means they borrowed shares and sold them, hoping to buy them back at a cheaper price and pocket the difference. But such bets have been disastrous recently.

GameStop was trading at less than $18 a few weeks ago. Its stock shot higher after the company named three new directors to its board on Jan. 11 to help speed its turnaround, including a co-founder of online pet-supply retailer Chewy. The thought was that should help GameStop’s digital transformation.

A cavalcade of smaller investors, meanwhile, has been exhorting each other on the internet to keep the stock’s momentum flying toward the moon. Many are pitching it as a battle of regular people versus hedge funds and big Wall Street firms.

It took just five days for GameStop’s stock to double after announcing its board shakeup. This past Friday, it surged 51%, a larger gain than big stocks like Apple or Exxon Mobil have ever had in a day. For GameStop, the 51% move was only its second-best day of the month — and the month isn’t over.

The meteoric rise pushed some short sellers to get out of their bets, done by buying shares of the stock, and that helped accelerate its momentum even further. On Monday, the push and pull was so extreme that trading in GameStop’s stock was temporarily halted at least nine times for volatility.

It was at $73.33 in afternoon trading, after swinging between $65.01 and $159.18 earlier in the day.

Story continues below advertisement

“This is quite the experience for my first month in the stock market. Holding till infinity,” posted one user on a Reddit discussion about GameStop stock, named The——Danger——. A moment later, a user named thesethbowlby said, “We’re literally more powerful than the big firms right now.”

That same sentiment carried well beyond internet message boards to Wall Street itself.

“As someone who started trading stocks in the late 90s in college, I would always remember watching when the small retail trading groups would get crushed by hedge funds and savvy short-sellers,” Edward Moya, senior market analyst at OANDA, said in a report. “What happened with GameStop’s stock is a reminder of how times are changing.”

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies