Why do people buy from gamestop

Still, non-professional investors without a lot of money to spare could lose out if they buy now. If you have no experience dealing with that kind of thing, you will lose your money very, very quickly. Don't miss: The best credit cards for building credit of Skip Navigation. Jennifer Liu. GameStop logo is seen at one of their stores in Emeryville. Check out: Critics view Robinhood restricting GameStop trades as 'an absolute travesty' 'You will lose your money very quickly': What investors need to know about GameStop's stock surge GameStop is being called a 'pump and dump' scheme—here's what you need to know Don't miss: The best credit cards for building credit of One such tweet was posted by Mr Cohen on Wednesday evening.

Soon after that post, the shares began to surge. Once the run began, however, it became self-sustaining. Followers of the stock encouraged others to buy and hold it, in the hope that they could get some of the returns that were available last time around. Given how famously well the shares did last time around, at least before the resulting crash, it is likely that any suggestion there could be a repeat performance will drive more people to buy the shares — itself pushing the price up.

GameStop shares skyrocketed in January as retail investors, urged on by popular Reddit forum WallStreetBets, bought the stock as a way to punish hedge funds that had taken an outsized short bet against it. The risky trading strategies employed by some traders on Reddit have drawn the ire of investing legends such as Charlie Munger, long time business partner of Warren Buffett.

A fter two weeks in which GameStop became one of the hottest stocks of the year , its share price whipsawed on Thursday when the amateur trading platform Robinhood barred users from investing in a number of stocks including GameStop. A year-old store manager from Pittsburgh, US , first heard about the GameStop shopping frenzy at work. My parents would freak out if they knew I bought these shares. But then it surprisingly rallied again through February and March, pushed by the same group of traders, on hopes that Chewy co-founder Ryan Cohen -- who will become chairman of Gamestop after the company's annual shareholder meeting in June -- can execute a successful transition to e-commerce.

Gill's posts advertising his massive holdings in the stock and his bull thesis helped rally other traders, who were inspired by Gill's refusal to sell even as he sat on millions on gains. Gill has become the avatar of the GameStop traders, and like many of those most enthusiastic about the stock, he's a millennial. Though the short squeeze formed a cornerstone of the initial GameStop bull thesis, there were other reasons why the video game retailer attracted the millennial generation.

Millennials were the first generation to grow up with modern video games. The industry wouldn't be worth what it is without them. GameStop's growth essentially tracks that of the millennial generation. If you're a millennial gamer, GameStop was where you bought games and consoles and traded in used games. Much like Blockbuster represents the video rental business from a certain era, GameStop does the same with video games.

Familiarity is a useful tool in investing. Millennials who frequent GameStop readily understand how the business works. While they may not know the financials or the other particulars of the stock, they have a level of knowledge regarding the company and the broader video game industry that many older investors do not. That's a great starting point for learning more about the stock, and that familiarity with GameStop helped make it popular among Reddit traders, which made the short squeeze so successful.

A similar phenomenon also took place with movie theater operator AMC Entertainment.