Although I believe there is a turnaround story for GameStop (NYSE: GME) and short squeeze is smart, it seems that the impact is more negative today. GME closed at $347.51 per share at 4pm, more than 4x the closing price I mentioned in Monday’s post. The negatives come from a few things:
1/ the story is not relevant to fundamentals now – however the healthiness of a functioning market depends on its ability to return to fundamental (in the long run).
2/ too much volatility + ripple effect of funds scaling back will cause additional chaos in the entire market. Some unnecessary negative feedback loop might form.
3/ people who entered the “casino” late probably won’t do well…
This mania may alert future participants/regulator, but may also set a bad example for markets globally.