Short-sellers who thought their bet against GameStop could pay off under-estimated the buyers. GameStop shares traded at around $170 before ending the week at ~$102. GME stock popped by 150% for the week when Reddit’s WallStreetBets reaffirmed their commitment to the stock.
The Chief Finance Officer’s departure is another positive catalyst.
CFO Jim Bell left to pave the way for activist investors and Ryan Cohen to transform the firm. GME has a tremendous opportunity to drive revenue for the video-game retailer. When gaming sales are rising sharply in light of the pandemic, GameStop has no reason to miss out. Activision (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA) are trading close to 52-week highs because of strong sales.
GME must find a way to profit from the industry’s growth. Shifting from a physical store format to an online one will require careful planning. Thanks to its strong stock price, the company has many options ahead.
GME could sell some stock to increase its cash on hand. At a $7-billion market capitalization, it is worth more than BlackBerry (NYSE:BB) or AMC Entertainment (NYSE:AMC)
GME may reward speculators buying at the $100 level. This trade is risky for those who cannot handle the volatility. Those who bought the stock months ago are ahead. Holding the stock is no risk. And any fundamental changes brought forward will only help the company’s prospects.
