Fun to Watch

by JDH on June 26, 2021

Is there a more interesting show on the markets today than Gamestop?  Here’s the chart for Friday June 25, 2021:

Cool, eh?  It spiked slightly higher at the open, then dropped all day, bottoming out at $198.50 around 3:30 pm, and then accelerated into the close, closing at $209.55.  That’s a gain of 5.5% in the last half hour of trading.

What happened?

It would appear that Gamestop is being added to the Russell 1000 index, as part of the annual re-balancing that happens on the last Friday of June every year (after the close).

In May, stocks are re-rated, and if a stock has a certain market value, and meets other criteria, it gets added to the Russell 1000 (and other stocks fall out, to keep it at 1,000 stocks).

So, if you are an ETF that tracks the Russell 1000, or a pension fund or hedge fund or whatever, to stay even with the index you have to buy the underlying stocks.  So, leading into the close, it would appear that a bunch of investors bought the stock.  Presumably, the buying will continue on Monday morning.

My question: since this news was widely known, why wouldn’t you buy it earlier in the day?

I assume the answer is “we need to track the index” so buying earlier isn’t tracking the index.


Congrats to all who bought leading up to the spike (on the assumption that it doesn’t crash on Monday).

In other news, it appears to me that Bitcoin is approaching a bottom.  Perhaps we’ll have a blow off crash, down on a spike to perhaps as low as $20,000, but I expect it to me much higher before the end of the year.

Or not.  What do I know?

Enjoy summer, it only lasts for so long.

See you next week.