In this paper, I will share some additional facts helping you understand why GME case was hardly a landmark in the financial markets. Similar phenomena happened in the past and it is very likely that they will happen in the future. However, GME case is significant in that it has presented great lessons ranging from how to expect and spot financial irregularities and how to manage your risk capital to recent digitization in finance and its ramifications for retail investors.
Tag Archives: GameStop
GameStop (GME) Part 1: Financial Mechanics explained
In this paper, I will explain why such a pricing irregularity concerning the value of the GameStop’s stock happened and it happened fast although the buildup was manifest to the trained eye. Obviously, GameStop may not be on your radar considering the current state of the company, the size of its market cap and shares floating, and disruptions faced by retailers alike; however, the financial mechanics here are relatively complex and understanding them will make you more prepared for similar cases that very likely will happen in the future.
In the 2nd part of this series, against the backdrop of part 1, I will elaborate further on lessons that must be learned by retail investors and how this saga may end.
Valuation of stock options: Will Black Scholes hold in real life? Company in focus: GameStop (GME)
Black Scholes is claimed to be one of the most important valuation tools in finance. However, will it really hold true in real life? A real world analysis on GameStop