GameStop drops as Stock Market partially rebounds

CHATTANOOGA, Tennessee- A day after the stock market saw its biggest crash since October the market clawed it way back Thursday.

The market’s volitivity wasn’t the only thing active this week as one stock has gone for a wild ride.

“I’d like to think that it’s a positive sign that maybe things are looking better but nothing fundamentally has changed overnight,” said VP at Barrett and Company, Chris Hopkins.

At market close on Wednesday the Dow Jones lost over 600 points for its worst day since October. Hopkins said the market dropped due to concerns about COVID relief bill delays, new COVID strains and the feds press conference.

“By the rumor sell the news so we got a little bit of selling the news yesterday when the Fed reaffirm their very cautious outlook. The chair said it again as we’ve all said the key to this whole thing is getting COVID behind us,” said Hopkins.

The Dow Jones and S&P 500 partially rebounded after the big drop.

I’m not certain that’s a good sign either because what we’re seeing is an almost reflexive reaction to go in and buy the dip. Any time the market falls and people rushing in by sort of indiscriminately.

Hopkins said volatility in the market is expected. Which is why it’s critical to invest for the long term not the short term.

“It’s extremely important to keep your eye on the ball longer-term. Have that focus on the long-term. What are you trying to achieve in 10, 15, 20 years down the road, and invest towards that goal,” said Hopkins.

Stock in GameStop is not following the market at all and it has nothing to do with buying video games, even classics like this one.

People are using social media, in this case Reddit, getting people to buy GameStop stock. Hopkins said this artificially pushed the price up.

“It went from $20 a share on January 1, this morning it topped out at $470 a share. What a bunch of individual investors come in and buy the stock and force the stock price to go up. All the people who are against it have to unwind they’re bets but buying The stock back. That amplifies the upward pressure now the most of that is behind us we’re seeing the air come out,” said Hopkins.

Back on Jan. 1st GameStop stock was trading at $20.

Some people thought it should be trading for less, Hopkins told News 12, he thinks it’s a $10 stock.

Now a lot of those people shorted GameStop, which means to bet against.

Now when everyone rushed to Reddit and said buy game stock and everyone did, the stock was forced up to nearly $500.

More money gets thrown in as people continued to buy, which makes stock artificially grow. The stock fell throughout most of Thursday.

Hopkins said this is causing those who bought the stock near or at the top to lose money.