Shares of the new WSB plaything were up more than 230% Wednesday after members of the Reddit board were touting the stock and got #SaveAMC trending on Twitter.
But GameStop faces many of the same problems that other retailers face. It was struggling before the pandemic, as video games went digital and Amazon began eating into its market share. With malls dying across the world, those fundamentals aren’t about to change — and certainly haven’t changed so dramatically in the past few days and weeks to send its stock soaring nearly 700%.
That’s why this Reddit saga isn’t just about fundamentals.
Although the hive mind of WSB poses some real dangers of a bubble mentality, there’s no arguing with their success. Short-sellers rushing in to hedge their bets and cover their positions are keeping Reddit’s stocks soaring with no signs of stopping.
Two questions remain: Who’s next? And what happens when the bubble bursts?
— CNN Business’ Julia Horowitz contributed to this report