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GameStop Stock Volatile As Trading Frenzy Begins

The trading craze over GameStop’s (GME) stock has returned this week, echoing the investment frenzy from 2021.

What spurred the dramatic stock movement recently was a social media post from Keith Gill, known as Roaring Kitty. He was one of the major investors responsible for causing GameStop stock to explode a few years ago, and he posted a cryptic message to the X platform on Monday.

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GameStop stock responded by jumping 110%. The stock is still high, increased by 125% from the previous day at the time of writing. We will see where it goes once the market opens for Tuesday.

Investors should beware of expecting too much from this stock, as there is little reason to expect that the jump yesterday will result in long-term gains. What we may see is a short-term trading frenzy that dies off as quickly as it started, since the trading is not the result of GameStop improving as a company.

In fact, GameStop has been suffering lately, cutting jobs to cover losses. Retail sales for the entertainment sector are down, and movie theaters and video game retailers are feeling the pinch.

Is This a Good Time to Invest in GameStop?

Traders should be very careful about investing heavily in GameStop right now. The stock is all over the place and could very easily drop back down to its previous low by the end of the day.

The stock was trending down last week, with investors being advised to steer clear of it due to the high risk involved. GameStop has not demonstrated resiliency as a game retailer in this post-pandemic market, and a short-term trading frenzy is not likely to change that.

New attention is being brought to the stock, but that is likely to be short-lived. This stock could blow up and surge very high very quickly, but it is a high risk investment and should be treated as such.

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Timothy St. John
Timothy St. John
Financial Writer - European & US Desks
Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.
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