As amateur investors banded together this week to squeeze Wall Street hedge funds by sending GameStop’s stock prices to dizzying heights, some novice traders, like 10-year-old Jaydyn Carr of San Antonio, have seen their long-term investments pay off.
In December 2019, Jaydyn, then 8, was buying discounted games at GameStop and wishing for an Xbox One. Spying a way to use her son’s enthusiasm for video games to teach him about investing, Jaydyn’s mother, Nina Carr, decided to invest in 10 shares of GameStop at $6.19 a share for a Kwanzaa gift.
Ms. Carr handed her son a certificate she created from an online template to explain to him that he was the owner of a tiny part of GameStop. She told him the gift was in keeping with the spirit of ujamaa, or cooperative economics, one of the seven principles of Kwanzaa.
GameStop vs. Wall Street
Let Us Help You Understand
- Shares in GameStop, the video game retailer, have soared because amateur investors, starting on Reddit, have bet heavily on shares of the company.
- The wave gained momentum in response to large hedge funds short selling GameStop stock — basically they were betting against the company’s success.
- The sudden demand has driven up the share price from less than $20 in December to nearly $200 on Thursday. On paper, anyway.
- It’s not just GameStop. Amateur investors have backed other companies that many big investors had shunned, such as AMC and BlackBerry.
- This bubble around GameStop may force big investors to raise money to cover their losses, or dump shares of other companies.
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