The mania continues for the video games. Company game stop after robin hood, have allowed its users to start buying the stock. Again we have seen his stock price catapult back up. So in this video we need to talk about what is the end game for gamestop stock. When will the rally stop or will it keep going and let’s start just in case you’re here, because you’re still confused with what has happened to gamestop, with a super brief explanation and just quickly, as always, if you don’t mind giving this video a thumbs up, if You like it and consider subscribing to my channel. I would really appreciate it, so we can continue to grow this great community on youtube, so it all started with the reddit group wall street bets who saw an opportunity with gamestop stock. It was a company that has been struggling during the pandemic and they said if enough people buy into this stock, they could cause the stock price for gamestop to skyrocket. Well, it worked and the stock price went up a lot, but for some investors this was not their only goal and they saw this as an opportunity to take out the hedge funds of wall street. These are investment companies who cannot only earn money if a stock price goes up, but they can also earn money if a stock price falls by using a method called shorting. This is how it works. Let’S say a game. Stop is currently 20, which it was around that price before this all kicked off.

Well, hedge funds would plan to borrow this stock from other investors and then sell it on the public market for twenty dollars, because they believe the price will go down. They will wait for the price to drop, to say ten dollars then buy back the stock at this cheaper price and give back to whoever they borrowed it from and ignoring transaction costs. They would make a 10 profit in this example from the share price dropping. However, this kind of strategy can also be very risky, as you can lose a lot of money, because if the share price goes up, then at some point you will need to buy it back to return it to the person you borrowed it from, and some people On wall street bets wanted to hurt hedge funds, and one hedge fund actually lost billions of dollars, because gamestop stock price went way up instead of way down like they had originally thought. But it doesn’t end there, because the initial increase in price caused by individual investors buying, in meant hedge funds, had to buy the stock back to cover their losses. In case it kept going up in price. This extra buying by hedge funds, then further caused gamestop to go up in value and when this happens, it’s also called a short squeeze almost like an infinite rally in the stock price. So what happens now with game stock stock with over 10 times the price? It was just a few days ago, and i have to stress this is just my opinion.

This is not financial advice. Well, it could continue on this rally now is taking out hedge funds and keep rising, and suddenly we will be at our point where this stock is at a thousand dollars and gamestop is a 70 billion dollar company. Maybe if it does get to this point, they can start using this extra value to grow earnings, expand margins and execute new plans to become a dominant player in the video game industry. This is a kind of end game where the company’s long term vision is going to change, and investors start to look past. The average fundamentals of the company of today and start to value the company on what it can do in the future and therefore the valuation becomes more justified or the more probable end game for game stock. Is the stock will keep going up then it’s going to come a point where it’s going to come crashing back down again and that’s how bubbles, as well as speculative manias and pump and dump schemes work? Now? When does this crash actually happen? Well, it’s hard to say, especially with the reddit group wall street, bets literally growing at a million users per day, who is to say that these new users won’t buy gamestop as well and just keep the rally going. This could especially happen because the short interest for gamestop stock remains high, so maybe individual investors aren’t done just yet or maybe they are ready to use a collective power and turn to a different stock and carry out a similar kind of strategy and take down hedge Funds, one by one – this is all just speculation by me: i’m, really trying to predict what happens to game stop stock from this point onwards is extremely unpredictable, which brings me on to the important point about online trading platforms.

These also play a large role in where the price goes in the future, as this is the main channel used by most individual retail investors to buy gamestop stock and, as most people know, on thursday january 28th, the trading app robin hood stopped investors from buying gamestop And only let them close their positions; in other words, they were only able to sell game, stop which infuriated rightly so, a lot of people with even elon musk, who hates short sellers chiming in and agreeing with politicians who are against the restrictions robin hood put in Place anyway, these restrictions placed by robin hood caused gamestop’s price to fall temporarily, but when robin hood allowed investors to start buying gamestop again on friday, the price went back up, showing there is still some serious interest in the stock with potential for more of a rally. So, overall we are at crossroads. Will the collective power of retail investors persist and will we start seeing this become a regular thing or are we gon na see gamestop stocks price crash which, by the way many people on wall street bets don’t seem to care about losing money on this investment in Gamestop as long as they can stick it to wall street they’re happy only time’s going to tell so. I hope you found this video somewhat useful in explaining what is happening and what could happen in the near future and by the way. If you do want to get involved with investing, but don’t want to be restricted with what stocks you can or can’t buy like robin hood, then the alternative, investing app weibull will be giving you four free stocks when you deposit your first 100 just use the link Down below in the description – and let me know what free stocks you get with, that being said, thank you guys so much for watching.

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