The GameStop shares ripple is helping other stocks but for how long?

The GameStop share price spike has raised eyebrows and stock prices. With Reddit users fuelling a large boost for GameStop shares, other companies, including AMC, have all enjoyed a ripple effect, but how long can it last?

  • GameStop price movement causes ripple effect.
  • AMC and Blackberry shares spike amid ‘psychological’ movement.
  • Will GameStop value continue to rise or will regulators stop Reddit pump?

Analysts have been tracking an unprecedented run for GameStop (GME.N) shares this week. Prompted by users of the WallStreetBets (WSB) sub-reddit, the rush of activity has resulted in shares moving from $39 to more than $470 in just over a week. Doug Clinton, the co-founder of Loup Ventures, has described it as an intriguing trend that’s more about humans than money.

Does the GameStop share price ripple effect make sense?

In Clinton’s view, it ‘doesn't make business sense’ but it does make sense from ‘an investor psychology standpoint’. His point is that the latest GameStop share price isn’t based on any underlying value in the company. Instead, it’s based on the attitude of investors. In this case, that’s the self-proclaimed ‘degenerate’ investors from Reddit who appear to have a vendetta against Wall Street short-sellers.

This emerging battle between business and psychology is reverberating across the markets. What’s now being described as the GameStop ripple effect is leading to upswings for other companies.

The Blackberry (BB.N) share price has jumped from $14 on 22 January to a high of $28 on 27 January. Also caught up in the buzz is AMC (AMC.N). The AMC share price has been flat since the start of 2021 due to COVID-19 restrictions keeping moviegoers out of theatres. However, following interest from WallStreetBets and a barrage of AMC logos on various social media platforms, shares spiked 300% between the 26 and 27 January.

The GameStop ripple effect is also helping unexpected targets. A small mining company from Australia saw its shares increase by 50% overnight. GME Resources (GME.AX), which trades on the Australian Securities Exchange (ASX), saw its share price increase from AU$0.075 to AU$0.10 on 28 January. Why? Because it’s ASX code (GME) matches that of GameStop. In other words, all ripples lead back to GameStop and, in turn, Reddit.

What is the ripple effect all about?

For analysts like Clinton, this is the reason business and psychology are at loggerheads. Moreover, it’s the reason we’re seeing a ripple effect. The question now is how long will GameStop shares continue surging and will other companies get caught up in the rush? WallStreetBets have shown that their fight isn’t for GameStop but against Wall Street short-sellers. This means any company the group focuses on could receive a pump. However, the movement may be coming to an end.

The White House has issued a statement saying that it is ‘monitoring the situation’. Nasdaq's chief executive Adena Friedman has also said she will ‘halt’ a stock if anonymous social media posts are fuelling ‘pump and dump’ schemes. Will more stocks become unwitting benefactors of the GameStop ripple or will the WallStreetBets movement run into an insurmountable roadblock?

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.