by Timothy Geigner on (#5DBWK)
Let's get this straight out of the gate: I am an expert on nothing to do with the stock market beyond my own personal investments. So, absolutely none of this should be taken as any advice or indication that a certain position in any market is being advocated personally by me. This is not a post about where you should invest your money. It is, instead, a post about how silly certain portions of the stock market appear to have become.And that statement is informed by a decade of watching GameStop, the retailer for new and used video games, new and used video game consoles, and mostly new Funko Pop toys, has been driven further and further from relevance. While predictions about the demise of GameStop have been around forever, recently there is more reason to think they're going to become true. First, the trend of expanded purchases for digital downloads does away with a hefty chunk of GameStop's potential revenue. Yes, GameStop offers its own digital download platform... but nobody uses it. In recognition of that trend, the next generation of consoles are being offered with an option to forgo any optical drive entirely, which would be another nail in GameStop's coffin if widely adopted. And, like most retail operations, the COVID-19 pandemic has severely crippled GameStop's business.Which is why those challenges and trends are accurately reflected in GameStop's stock price, because... oh, wait... shit.So, yeah, in the month of January, GameStop's stock has risen roughly 4x. And if you want to try to explain that away, please note that pulling the timeline back further actually makes all of this look way more bonkers.Okay, so what's going on here? Did GameStop come up with an entirely new strategy to propel its relevance in the long-term video game industry? Did it totally restructure, coming up with cost-saving measures or store and staffing closures that make it suddenly more profitable? Was there some consequential change of leadership or outside investment in the company?Nope, none of that. Instead, there appears to be a sort of insane tug of war going on right now on Reddit between short sellers and day traders that is artificially sending this stock on an insane rollercoaster.