Will GameStop Stock (GME) Keep jumping up this week?

Recently huge news came out involving the Reddit Group WallStreetBets vs the shorting Hedge funds. Many people are wondering if the stocks involved in this historical Wall Street event will continue to rise. Although many stocks are involved, the one stock questioned the most is GameStop (GME). Here we will look at what made GameStop rocket up, why it may continue to, and why it may not.

(Disclaimer: we are not professional stock advisors, just people who like keeping up with certain stocks. We are not recommending any actions such as buying or selling these stocks.)

Starting in early January 2021, GameStop made record shattering highs in its stock. To this day, GameStop (GME) is up over 7500% for the year, and 1,400% for the month. This past week alone the stock went up over 220%! Through the last weekend of January it is sitting at $312.01. That’s amazing considering it was around $10 a year ago. But how long will this trend continue?

Why did GameStop Stock jump so high to start?

First we have to look at why it went up. This is also why the stock has made mainstream headlines and gone viral on social media. We won’t go into full detail here, but in short, GameStop was actually supposed to go down in value this week, dropping slowly after a small rise. With much data to support this, many hedge fund billionaire companies shorted the stock, meaning betting against it, in hopes that it would fall. The Reddit group WallStreetBets saw an opportunity to get back at big money, and made a social media campaign online to buy and hold the GameStop stock. This pumped up GameStop’s price, causing the capitol hedge fund companies millions, and some billions. Some of these companies were Citron Capitol, Melvin Capitol, Maplelane, and D1, just to name a few. Their plan worked. Soon even Elon Musk and other big names were tweeting about and supporting the idea.

Now that the general public, not just investors of all types and hobbyist of the market, know about the buy and hold tactic, will it continue to go up? We will take a look at the factors involved. Covering what may make it go up, or what will make GameStop go back down. Warning, eventually, at some point it seems inevitable the hype will go down, but will it be this week?

Why GameStop Stock May Keep Going Up

This past week has seemed like a dream for individual every day investors. The GameStop rush has made money for everyone who owns the stock (so far). Many have praised the incident for helping pay off mortgages, student loans, even expensive surgeries! So it seems more and more people support the stock each day. But is that enough to keep any stock up?

One of the biggest factor is if and when will everyone sell the stock, or will they keep holding it. Some have a planned exit strategy, but with this volatile of a stock it’s hard to say when. Many online, especially in the subreddit group r/WallStreetBets, have claimed that they will hold neat indefinitely, keeping the big hedge funds from ever making there money back of their short bet. But is there enough people willing to risk losing their money to make a social/moral point?

Another supporting fact is the massive numbers involved in buying this stock, forcing its price to go up. The Reddit group r/WallstreetBets alone has an astonishing 7.6 million people, up over 3 million this month alone. And practically all these new members are there to monitor and follow the GameStop hype, along with other stocks involved. Also, the mainstream media and social media have been blasting this story, gaining even more attention. Others who claim to support the smaller investors but are in the richer class, claim to also plan on helping. This may be one of the main reasons this GameStop stock gold rush is not soon to be over.

Another unique factor to the amazing gains of GameStop is the political and moral interest involved. It seems obvious to some, that GameStop is actually not worth its current stock value, but that’s not the point. Like mentioned before, many are buying and holding these stocks to get back at big money, billionaires who they believe control the market. So that spirit may keep the stock strong for awhile.

Why GameStop Stock May Go Down

What goes up must come down, right? Well, not exactly, but likely. Over time it is shown the stock market always bounces back up, but not true for individual stocks. Many fear this bubble will be over soon, causing a panic of sales and losses. So should you get out now or hold off? Judge for yourself. Here are some factors.

First we are going to dive into one of the dirtiest issues involving the GameStop stock rise. Robinhood, along with many online broker apps, haulted buying GameStop stock late last week, allowing it to only be sold. This practically forced the stock to go down. Many are saying this is market manipulation. Robinhood said this was the responsible thing to do to protect investors. The legality and reasons are still unclear. But, the GameStop stocks may be regulated again, causing a decline in value.

Secondly, this is a battle against the top dogs, the big money. This online stock war so far has leaned in favor of small investors. Tomorrow may be different. Although everyone has invested in favor of GameStop, there is only so much that can go in, meaning it can only go so high. Once it reaches that peak, the hedge funds shorts may be active again, this time successfully pushing it back down in value.

Lastly, it’s very unlikely this value will hold, as overrated the stock itself is. The movement may end, but the stock will still be there. There will be bag holders, some willingly, some stuck at a loss. So when GameStop stock falls, it may fall hard! Although all month it has gone up, it could go down just as much in a day. There is always a risk in every stock. And usually the better the gains, the more the risk. We’ll see how it all unfolds the following week. Either way it will be interesting.