How To Buy GameStop Stock – A Game Worth Playing?
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Back in 2021, investors from a Reddit chat room banded together and bought shares of GameStop stock, hoping to drive the price up and cause havoc for investors betting on a share price decline. Boomers who had never even heard of the video game retailer (unless it was to buy video games for grandkids a decade ago) were suddenly paying close attention. Even Tesla's Elon Musk tweeted about the stock, giving props to those standing up to Wall Street. After starting 2021 at $17.25 per share on the NYSE, GameStop rose to $347.51 on January 27. The price dropped the next day to $193.60 and fell to about $40 in mid-February.
GameStop became the most short-sold stock of any publicly traded company, and its current stock sits around $49.82 (as of May 14, 2024) after losing steam and being further impacted by worries over inflation and a potential recession.
That said, on May 13, the man who started the mania, known as “Roaring Kitty” (and the feature of the movie "Eat the Rich," posted for the first time in 3 years. As a result, GameStop stock is climbing again and has already hit the 2021 high. If you want to get on this roller coaster, I’ll show you how to do it.
In this article
Step 1: Find a broker that offers GameStop stock
Of course, you need a broker, but first, you must find one worth joining. You won't want to waste your money on high fees and broker commissions, so look at online brokers who can help you get in on this stock for less.
Here are a few good online platforms to look into.
Stash
Stash is an investment app that sells thousands of stocks and ETFs, or exchange-traded funds, for $3 or less. Beginning investors can begin at just $3 per month. Ready to go deeper? Its Growth account, which adds to retirement account access, is $3 monthly. The top-of-the-line is Stash+. For $9 per month – $324 a year – you get retirement account access and investment accounts for two children, among other things.
No opening deposit is required to open an account. You only need to deposit money to buy stocks, of course. But Stash offers a little incentive to start investing.
And like its competitors, you can find your way into GameStop through fractional shares. Funds are pooled with other Stash members to make high-priced, higher-earning stocks more affordable by receiving a fraction of a stock and a fraction of the returns.
Pros and cons
Pros
- Low monthly fees, starting at $3
- Fractional shares of stocks sold
- No minimum deposit to open an account
Cons
- Focuses on investment goals, not the purchase of individual stocks
- A flat fee may end up being higher than competitors if you have more than $5,000 invested
Robinhood
Robinhood got swept into the GameStop craze because it was the main platform the Reddit investors were using. During the height of the bru-ha-ha, the company restricted trading in GameStop and other meme stocks, citing clearing firm costs.
Robinhood is a free trading platform that can be used as an app on Apple iOS, Android phones, or anywhere else online. Really. Robinhood doesn’t charge fees to open or maintain an account. New accounts can access up to $1,000 of instant deposits after you initiate a transfer. This account is called a Robinhood Instant account. Users can downgrade to a Robinhood Cash account if they want to. This allows zero-commission trades but doesn’t include instant deposits or instant settlements.
Users can upgrade to a Robinhood Gold account for $5 monthly ($60 annually). It includes everything in Robinhood Instant, with instant deposits starting at $5,000 and increasing based on your portfolio value.
Robinhood Gold also offers margin investing, where you borrow money from Robinhood to buy stocks. To trade on margin, at least $2,000 must be deposited into the account.
But nothing is ever entirely free. Robinhood also has these three fees:
- Regulatory transaction fee that’s ultimately paid to the Securities and Exchange Commission, or SEC. These can't be avoided; the fee is $8 per $1,000,000 of principal (sells only). The fee isn’t charged for values of $500 or less.
- Trading activity fee of $0.000166 per share (equity sells) and $0.00279 per contract (options sells). No fee is charged for buying 50 shares or less. That's not bad.
- American depositary receipt fees range from $0.01 to $0.03 per share when buying foreign stocks traded on American exchanges.
But here's what is great: Robinhood doesn’t require a minimum sign-up. Even with only a few dollars, you can invest through Robinhood. Signing up for its Instant or Cash accounts doesn’t require a monthly fee, so your investment costs can be zero.
Wait. It gets better. Robinhood sells fractional shares. Instead of buying one full share of stock, you can buy a fraction of an equity stock for as little as $1. Fractional shares bought through the site can be as small as 1/1,000,000, or 1 1-millionth of a share. So, if you think the GameStop share price is too steep, this is your way in.
Pros and cons
Pros
- Not into commitments? Robinhood makes it easy to start investing.
- No monthly fees
- No minimum account balances
- Fractional shares of stocks sold
Cons
- Not as many investment products are offered as some competitors
- Not a goal-based strategy
- No phone number to call for customer support
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Step 2: Research GameStop shares
GameStop was founded in 1984 in Dallas as Babbages and took its current name in 1999. The company is now headquartered in Grapevine, Texas, a video game, consumer electronics, and gaming merchandise retailer.
GameStop, listed as GME on the NYSE, began trading on February 13, 2002.
The company started declining in 2016 when online services such as Xbox Live, PlayStation Network, and others hurt GameStop’s market for physical video games.
Like many businesses that relied on physical stores, the pandemic caused GameStop to have dramatically lower foot traffic. Between March and May 2020, it closed all 3,500 stores and moved to the curbside and online sales. After reopening, GameStop has since shuttered 12% of its stores.
In January 2021, the short squeeze on GameStop shares caused the share price to increase by 1,500% over two weeks to an all-time intraday high of $483 on January 29, 2021. The Reddit users on WallStreetBets who made stock bets were the key to the huge price jump. Recently, the stock has been soaring high driven by the meme stock mania and has hit the 2021 high.
GameStop Corp. saw its stock price increase when Chewy cofounder and CEO Ryan Cohen bought a 12.9% stake in GameStop through his investment firm RC Ventures. The hope is that Cohen can do what he did for video games, GameStop for pet food, and Chewy – turn it into an e-commerce giant.
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GameStock price history
If you have owned almost any stock since its inception, chances are it will grow tremendously over the years. GameStock is no exception.
If you invested $1,000 in GameStop when it launched and was sold as stock on February 13, 2002, your investment would be double today. You would have 99.50 original shares and a two-for-one stock split adjustment, so your holding would be 149.25.
Before 2021, GameStop's stock usually sold for around $40 per share. As of June 13, 2022, it closed at $118.25. Owning 149.25 shares then would have been worth $17,648. However, holding your shares until December 20, 2023, would be worth $2,644, double your original investment amount.
GameStop dividend information
GameStop last paid a cash dividend on March 29, 2019, to shareholders of record on March 15, 2019. The dividend was $0.38 per common share.
The company hasn’t announced a dividend since then.
Investors shouldn’t expect a dividend anytime soon, partly because the company isn’t making a profit. A Wall Street consensus is that it will be three more years before GameStop starts making a profit again, essentially by closing stores and focusing on higher margins in e-commerce sales.
According to one analysis, the short squeeze is over, and the shorts have been mostly covered.
Best features of GameStop stock
If you didn’t buy GameStop shares before it rose 1,500% over two weeks in January, you can still buy it and take a chance that it will rise again. The stock closed at $118.25 in mid-June 2022 before the stock split, and improvements at the company could push it higher. It trades at a huge discount today and could be a good deal.
It recently reported the fourth quarter results; its net sales stood at $1,793 billion while the gross profit hit $419 million. It reported a net income of $63.1 million. The company is profitable and this is a positive sign.
GameStop appears to be on the road to becoming an online-only company like Chewy. Some analysts expect it to close all or most of its physical stores and only to do business online.
Another reason to believe in GameStop is Cohen, the CEO, also a major investor. Cohen is looking for ways for the game company to transition beyond brick-and-mortar stores.
Cohen invested $76 million in the company in 2021 when its shares were trading at an average of $8.43. He has shown an interest in improving the company, which, if his plans work, could make him and other retail traders a lot richer, too.
Step 3: Open an account & buy GameStop shares
Still interested in GameStop? Then, it's time to open an online brokerage account. You don’t have to fund an account immediately to open one, though you’ll need money to buy at least one share of GameStop stock.
Using Stash, for example, is as easy as any other online broker. Start by clicking the blue “Get Started” button on the homepage and many other areas of the Stash website.
An email account and password are the first steps in creating an account.
You’ll next be asked to provide some information about yourself so Stash can determine what type of investments you’re interested in. This is part of Stash’s aim of meeting your overall investment needs, not just focusing on buying one stock.
You’ll provide your name, birthdate, phone number, citizenship status, residential address, estimated pre-tax household income (to evaluate your risk tolerance), and reasons why you want to invest.
Then, you pick a plan, starting at $3 per month.
And, of course, pick a payment method.
If you go directly to the Investments page, you can look up a stock name or research stocks and ETFs to see if fractional shares are offered. You can also search by industry and by ETF category.
GameStop stock can be bought in fractional shares, with as little as $5 invested. Click the blue “Check out on Stash” button and the account signup process begins.
Related: Best Robo-Advisors
FAQs
How much were GameStop shares when the company first went public?
$10.05
How much does it cost to buy GameStop shares today?
$49.82, as of closing on May 14, 2024.
Does GameStop pay dividends?
Not currently. It last paid a dividend on March 29, 2019, of 38 cents per share.
What is the minimum number of GameStop shares that I can buy?
You can buy one share, or you can buy a fractional share. Stash doesn’t list the minimum fractional share that can be bought, though it says the minimum investment is $5. Robinhood sells fractional shares in shares as small as 1 million parts of a share of stock, for as little as $1.
The bottom line
If social media is your stock ticker and meme stocks have grabbed your attention during the pandemic, or if you check MarketWatch throughout the day, you may be interested in buying shares in GameStop. GME stock has risen faster than many stocks, and you may have a few dollars to get in on the action.
An online brokerage account such as Stash, Webull, or Robinhood can be a good way to dip your financial toe in the stock market. Trades can be free or close to it, and you can buy fractional shares instead of having to come up with hundreds of dollars to buy one share.
Remember that any money you invest should be money you’re willing to lose. Volatility is common in the stock market. Hedge funds lost money by shorting GameStop, and a bet by a small investor that it will be profitable could be just as risky.
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Writer
Aaron Crowe is a freelance journalist who specializes in personal finance writing and editing. He has worked at newspapers, where he won a Pulitzer Prize, and has written for numerous online publications. These include AOL, US News & World Report, WiseBread, Bankrate, AARP, and many websites focusing on housing, credit and insurance. He lives in California with his wife and daughter.
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