# How much money would you have if you had invested 1,000 euros in Gamestop a month ago

The situation on the stock market of GameStop, one of the most important video game marketers of our time, has put all of Wall Street. The reason? The incursion of tens of thousands of users of Reddit, the most visited forum in the world. This fact has caused the share of the company to shoot above 340 dollars , about 280 euros at the change. To assess the impact of Reddit on the North American firm, we have made an estimate of the return that we would obtain if we had invested 1,000 euros exactly one month ago, that is, at the end of December.

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## How many GameStop shares could you have bought with 1,000 euros in December?

Before analyzing the appreciation of the GameStop share, it is convenient to know the market value of the company at the end of December. Coinciding with a downward trend, the share value as of December 28, 2020 was approximately \$ 19.50, which at the exchange rate is approximately € 16.08 .

That is, if we had invested 1,000 euros in the company at the end of 2020 we would have obtained a total of 60.6 shares approximately if we ignore the rates that some virtual brokers apply when trading on the stock market.

## This is what you would have now if you had invested 1,000 euros in GameStop

Starting from the previous relationship Calculating the revaluation based on the initial investment is relatively straightforward. At the time of this writing, GameStop’s stock is valued at roughly \$ 347 .

GameStop trend in the last month (from December 28, 2020 to January 28, 2021).

This amounts to about 286.10 euros in our currency, so that the revaluation in absolute terms is calculated at 1,780%. In other words, our initial investment would have appreciated by almost 2,000% in less than a month, a trend more typical of cryptocurrencies than of a company with IPO.

GameStop trend in the last 6 months (from August 2020 to January 2021).

Therefore, our capital would have increased to 17,800 euros. If we had invested 10 times more, that is, 10,000 euros, we would be talking about a gross profit of almost 70,000 euros , 700,000 euros if we had invested 100,000 euros. If we had invested the same initial amount (1,000 euros) at the beginning of August, when GameStop’s share was valued at 4 dollars, about 3.30 euros at the exchange rate, the revaluation would be calculated at more than 8,700%, so we would have obtained a profit of no less than 860,000 euros . Yes, you read it right. 860,000 euros

## A matter of Short Selling…

That’s right. GameStop’s controversial revaluation is due to a short bet against the company by Melvin Capital, the investment fund led by Gabriel Plotkin. Given the downward trend of the company in recent months, the fund bet up to 140% of the total number of shares available that the GameStop stock would decline during the following months, which is also known as a low bet, short bet or Short Selling.

After the recent revaluation of the video game distribution company, Melvin Capital has been forced to receive a capital injection of no less than 2.75 billion dollars, about 2.275 million euros at the exchange, from Point72 and Citadel. According to estimates by S3 Partners, the losses are estimated at 5,000 million dollars , about 4,123 million euros at the exchange rate. In recent hours, this figure has only grown due to the incessant appreciation of the company.