Shares of GameStop (NYSE: GME) soared as high as $483 last week. By midday on Tuesday, the stock price had fallen below $100 per share.
Behind the volatile stock price is a battle between retail investors who frequent the WallStreetBets subreddit and hedge funds, which have heavily shorted shares of GameStop and a number of other stocks in recent years. The WallStreetBets group has also targeted AMC Entertainment Holdings (NYSE: AMC), BlackBerry (NYSE: BB), and Nokia (NYSE: NOK), among others, which have seen their stocks swing violently over the last couple weeks.
Whether you bought into one of those stocks or watched the action from the sidelines, there are some important lessons everyone can learn from what’s happened.