The performance of GameStop (GME) - Get GameStop Corp. Class A Report shares this January is quite different from their performance last January. Shares are down about 30% YTD - that’s a far cry from the hype-fueled, sky-high soaring that GME was experiencing just one year ago.
In spite of a disappointing start to the year, and even with unfavorable momentum and not-so-bullish indicators for the short term, GME shareholders are holding on tight, refusing to give up their gains to short sellers.
Leaving aside GameStop’s fundamentals and focusing on the behavior of its shareholders, we’ll take a deeper look at the resilience of the GME apes’ community.
(Read more from Wall Street Memes: Is Dogecoin’s Performance Dependent On Elon Musk’s Mood?)
Have short sellers stopped the bleeding?
According to the latest data coming out of an S3 research report, as of October 2021, short sellers had lost more than $6.21 billion betting against GameStop shares. However GME has lost nearly 50% of its share price over the past six months, and short sellers have recouped some of their losses during that period. Indeed, the same report
Figure 1: GME price performance vs. short % of the float.
Yahoo Finance
Popularity on Reddit won’t cut it
In January 2022, GME’s popularity was once again rocketing on Reddit's main forums; on January 19th, for instance, it was the most discussed ticker by far. See below.
Figure 2: Trending stocks on Reddit on January 19.
Apewisdom.io
And in pre-market trading on January 7, GameStop soared 32%. There was considerable retail excitement centered around the company’s announcement that it’d be entering the NFT space.
On the same day, GME’s ticker got nearly 3,000 mentions and more than 100,000 upvotes on Reddit, according to apewisdom.io.
Figure 3: Trending stocks on Reddit on January 7 pre-market.
Apewisdom.io
Even for a volatile stock like GME, double-digit percentage growth in a single trading day is an impressive feat. The short-term bullish wave was promoted by GameStop-centric Reddit forums such as r/Superstonk and r/GME.
However, even with its Reddit popularity shooting off charts, GMEs moon mission proved short-lived. Despite opening at $159.77 on January 7th, shares closed at $140.62, just a 7% gain from the previous day. Since then, shares have fallen nearly 25%.
How resilient are GME shareholders?
There are no two ways about it, for GME, January 2022 is shaping up to be a lot different than January 2021. And according to current indicators, it is very unlikely that lightning will strike twice.
Yet one of the most astonishing things about GameStop is the incredible resilience its shareholders have demonstrated. They’ve held their shares, despite the massive profits that could have been taken from cashing in, and they’ve even bought additional shares as the stock has dipped.
This “diamond hands,” never-say-die attitude is reinforced and encouraged on major Reddit forums and other social media channels. It’s the main reason that GME shares still sit above the $100 mark, giving GameStop an $8 Billion market cap.
While it is difficult to know the limit of GME shareholders' ability to hold - each individual investor has his or her own goals, after all - using the sentiment of the GME shareholder community as a yardstick, it seems reasonable to say that GME apes are far from giving up.
(Read more from Wall Street Memes: AMC Stock: House Of Cards Or Buying Opportunity?)
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Wall Street Memes)