Gamestop has already helped one trader turned $53,566 into more than $11 million.
Gamestop shares have soared more than 700% over the past four days, a price surge so dramatic that Robinhoond, TD Ameritrade and Charles Schwab all placed restrictions on trading of the well known video game retailer.
It’s easy to see how some people have been scared off because GME has exploded in value. Traditional Investors see both upward and downward volatility in a bad light. After all, you do not want your pension go down or up in value by 700%.
There are multiple sides to this story and everyone is looking for a scapegoat. On popular reddit forum r/WallStreetBets users blame “greedy” Hedge Funds and how they have shorted 130% of the GME stocks in circulation.
On the other hand you have more main stream correspondents claiming the volatility is due to online coordinated action and not natural.
Well, there is a 3rd side to this story about why Gamestop (GME)’s future looks a lot brighter now.
So basically everyone knows that Ryan Cohen has purchased a 13% stake in Gamestop and joined as a Board Member before the share price increase frenzy. As a user on r/wallstreetbets elegantly put it “His horsemen of the apocalypse coming to steal Melvin Capital’s lunch money.” It is well know that Ryan Cohen overcame much greater obstacles when turning CHEWY from a meager 100,000USD co-founded company to a $4 Billion in 2017 at which point he sold it to the holding company of Petsmart. Chewy is now valued at $40 Billion… This is an increase of %40000 since founding the company and %1000 increase since the acquisition.
Ryan Cohen managed this success with an unknown brand in a steady industry. Whereas Gamestop is a well know brand with 500mUSD/Year revenue and is part of ever evolving gaming industry. Explosion in the gaming industry is further fueled by rapid increase in no of gamers due to Covid induced self isolation.
Some of Ryan Cohen’s ideas are around setting up a Digital Game Exchanging platform, which can turn into an enormous exchange and truely turn gamestop into a Fortune 500 company.
Also, given support of 7m+ redditors on r/wallstreetbets who are wholeheartedly supporting this company, Ryan Cohen is dealt a good hand, and prove everyone that his success at Chewy was no fluke.