Heard on the Street: The army of individual investors that propelled GameStop will remain a force to be reckoned with, but the excitement is moving somewhere new
brokerage accounts were opened in the first half of the year, according to JMP Securities.
Current business fundamentals don’t justify the stock price, even with the most optimistic view of Chairman Ryan Cohen’s. After raising capital, GameStop is now flush and going about the boring, time-consuming business of business. Of course, that isn’t really the point: GameStop’s rise was never about fundamentals. For some it was a David-versus-Goliath battle to defend a nostalgic childhood brand against hedge funds. For many others it was the chance of a big and rapid payout. But these reasons no longer line up behind the stock either.
The chances of a big payout have also receded as GameStop shares have fallen into a pattern of gradual falls and the odd sharp rise. The retail excitement has moved on to different assets with greater potential for a big bounce. Cryptocurrency and vaccine stocks areThe power of the crowd was an important part of small investors boosting GameStop skyward. It also could work in reverse: Small sales across a large number of shareholders can add up to big moves.
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