The stock market and its impact on esports
By Kenneth Williams
The rise and fall of Gamestop revealed a lot about the stock market. While normally a stable framework for investors large and small, the brick-and-mortar video game retailer (NYSE: GME) completely rocked the boat. Massive Wall Street shorts sparked an unprecedented price increase due to retail traders. The spike was closely tied to social media, especially in existing financial circles.
Technology has made investing easier than ever, but it’s also changed the techniques people use. In the case of Gamestop, “meme investing” is now officially a thing. While there were some more or less legitimate reasons to invest in the game store, the majority of investors simply wanted to see what would happen. Retail investors don’t have nearly as much to lose, and advice (or peer pressure) from social media can be a compelling motivator.
The majority of esports news, financial or otherwise, is broken on social media. The video game business is rapidly evolving to include esports, and Gamestop is highly interested in competitive gaming.
How recent stock market interest may attract more investors to esports stocks
The Gamestop short is one of only a few stock market blow-ups to make international news in recent years. More people than ever have their eyes on the financial market, many watching vigilantly for the next Gamestop situation. Plenty of industries have a lot to gain from the newfound attention, especially esports.
Investors taking the Gamestop market cap raise seriously will quickly learn about the company’s esports ventures. In July of 2019, Gamestop announced a massive pivot in its strategy. Its stores would begin placing more emphasis on merchandise and gaming-related products. Chief among the announcements was that selected store locations would eventually serve as local esports hubs. Training, tournaments and talent scouting could all take place at the retailer. Natural investigations will point Gamestop investors towards esports, an already attractive investment space.
As for the company’s impact on social media, people are tuned into the stock market like never before. The driving force behind the GME surge was word-of-mouth advertising, especially on Reddit, Twitter and Facebook. Esports already have a massive presence on those sites, so it’s possible an esports company could be the next financial explosion. Regardless, more people talking about the stock market means more people potentially investing in esports.
Three esports stocks to watch in 2021
If you’re looking to invest in esports, there are already many options available on the stock market. Esports Entertainment Group (NASDAQ: GMBL) is one of the fastest-growing tournament hosts and one of the first appearances of esports on the stock market. The price had experienced a significant dip, though in past few weeks it has risen sharply.
Allied Esports Entertainment (NASDAQ: AESE) is an alternative if you want to invest in the core esports industry. Allied is incredibly active as a tournament host and has deep connections with several esports developers. At around $2.80 a share at the time of writing, AESE is one of the cheaper methods of entering the esports market.
Lastly, Guild Esports (OTCMKTS: GULDF) is the newest esports company to debut on the stock exchange. Guild sponsors players across several of the most popular esports titles, including Fortnite, Rocket League and VALORANT. Its October listing still hasn’t settled at a sustainable price, so there’s still plenty of speculation and guessing around Guild Esports.