GameStop, Corp., a Dallas-based video gaming retail company, has lost money in eight of its past 10 quarters, and yet its stock soared by as much 1,600 per cent in the opening weeks of 2021.
This week, on Down to Business, two different guests break down the GameStop phenomenon.
David Goldreich is a professor of finance at the University of Toronto’s Rotman School of Management; and Pauline Shum Nolan is a professor of finance at York University’s Schulich School of Management, and also the chief executive of Wealthscope, an investor analytics company.
GameStop’s incredible ride isn’t over, but it’s clear that a group of small investors used the internet to band together and stake out a position that put them at odds with several deep-pocketed hedge funds. In an inversion of the usual power dynamics, at least a few hedge funds have reported deep losses, and at least a few of the smaller investors are reporting big gains.