A tulip by another name? "Gamestonk" and the case for investor caution

The stock price rally to above $300 per share has emboldened some small investors to pour even more money into a company that Wall Street analysts tracked by Refinitiv believe is worth slightly more than $13 per share. The surge increases the risk that individuals will get caught up in the euphoria and look past the warning signs and consequences of an eventual crash.

Advertisement

“I dumped my savings into GME, paid my rent for this month with my credit card, and dumped my rent money into more GME (which for the people here at WSB, I would not recommend),” a Reddit user with the handle ssauron … wrote Thursday on WallStreetBets. “And I’m holding. This is personal for me, and millions of others.”

A form of class warfare waged through the shares of a video game retailer is notably different than financial market manias, such as the dotcom bubble in 2000 or the U.S. real estate bubble that culminated in the 2008 financial crisis, both which were fueled by assumptions of broad economic growth.

Yet for those who buy GameStop at the wrong time, the results will likely be the same.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement