The company that made big waves in the Stock market with the backing of ordinary reddit retail investors has made entry into an elite club of Russell 1000 Index. The company being talked about is GameStop and it is still the most volatile of the stocks and continues to amaze everyone.
What is GameStop?
GameStop Corp. is a video game retailer with many locations. Through its GameStop, EB Games, and Micromania shops, the company provides video game hardware, physical and digital video game software, video game accessories, as well as mobile and consumer electronics goods and other merchandise.
It has gained 4280% from a year and 26% in last month itself of its value. Though in the last week its stocks have come crashing down by 10%.
What is Russell 1000 index?
The Russell 1000 Index covers the top 1000 firms in the United States by market capitalization.
According to a chart from FTSE Russell, which develops the indexes, a business must be valued at least $5.2 billion by May 7 to be included in the Russell 1,000 Index, which is a collection of the biggest US equities. GameStop had a market capitalization of roughly $12 billion as of May 7th.
What about other meme-stocks?
AMC Entertainment, which spearheaded the most recent round of meme-stock craze in recent weeks, missed the deadline to be included. As of the market closing on May 7, the firm was valued $4.3 billion. However, the firm was valued at $28.3 billion as on 16th June.
According to Bloomberg statistics, GameStop and AMC are presently listed on the Russell 2000 and have risen to the top of the most valuable stocks as a result of their meme-stock status.
How did these meme stocks become so huge?
“Meme stocks,” which typically began as low-priced, massively shorted stocks that members of internet forums like Reddit’s WallStreetBets rally around, kept being on discussion and amazed everyone. The meme-stock craze started with GameStop and has kept on going with other ones.
Importance of being on Russell 1000 Index
When meme stocks enter into elite clubs like Russell 1000 index, it validates the ordinary Reddit traders. As Russell 1000 is a large cap index, GameStop will be tiny when compared to Facebook or Tesla, it won’t be able to sway whole index. However, it will become a mainstream stock and it will be viewed with other very large stocks.