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Does smaller, online investors’ impact on GameStop, AMC stock mean you should get involved?

Armed with brokerages’ free apps, many of this army’s members are trading stocks for the first time
In an earnings call Wednesday, GameStop said it plans to close between 400 and 450 stores...
In an earnings call Wednesday, GameStop said it plans to close between 400 and 450 stores globally this year.(CNN Newsource)
Updated: Jan. 27, 2021 at 10:53 PM CST
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(KSLA) — GameStop stock soared as high $380 a share Wednesday. That’s up from just $18 a share few weeks ago.

It’s the work of an activist community of online investors who ganged up on hedge funds, the Associated Press reports. Those funds had bet that the beleaguered video game seller’s stock would fall.

And now, the wire service adds, those smaller investors appear to be turning their attention to other targets, including AMC Entertainment Holdings Inc. The pandemic-ravaged theater chain saw its stock surge by 285% Wednesday. And the hashtag #SaveAMC was trending on Twitter.

Much of Wall Street readily doubts whether GameStop’s stock can hold onto its immense gains. Analysts have told the AP that the company is unlikely to start making big enough profits anytime soon to justify a $300 stock price.

But that does not diminish the impact this army of small investors has had on Wall Street.

With the aid of brokerages’ free apps, many of its members are trading stocks for the first time. And they’re coaching and encouraging each other online on sites like Reddit. The Reddit group Wallstreetbetts led the charge in creating the massive growth of GameStop and AMC.

“Microshare trades, which suggest online traders using different platforms such as Robinhood,” investor Steven Rueb said. “I discourage investors to try to treat the stock market like a gambling house.”

Rueb encourages those who are interested in trading to instead do their research, learn how the stock market works and invest for the long-run.

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