GameStop rises 13% higher as ‘Reddit army’ bets on sales turnaround

(Reuters) – “Meme” chief stock GameStop rose another 13% in value on Friday, building on an increase from results earlier this week that showed an improvement in online sales and an accelerating pace. of the highly publicized administrative reorganization.

FILE PHOTO: US one dollar bills are seen in front of the GameStop logo in this illustration taken on February 8, 2021. REUTERS / Dado Ruvic / Illustration / File Photo / File Photo

The video game retailer, whose shares rose as high as $ 483 in a battle with short sellers in January, has now risen more than five times in value since hitting a low of $ 38.50 a share in mid-February.

It was trading at around $ 190 by mid-morning, but was still down about 5% on the week after the company pointed to the possibility of a share sale in its earnings presentation on Tuesday.

“It’s fascinating because it looks like Reddit’s army is doubling down and he believes the company will be able to change its business and pivot into e-commerce,” said Edward Moya, senior market analyst at OANDA.

The company has benefited from a push from retail investors, often on online forums like Reddit’s popular WallStreetBets, to drive up the prices of stocks they believed were undervalued.

Short interest in GameStop has fallen to about 15% of the stock’s float from a high of 141% in the first week of 2021, according to data from financial analytics firm S3 Partners.

Chewy Inc co-founder Ryan Cohen seeks to transform the retailer into an e-commerce company that can take on big-box rivals such as Target Corp and Walmart Inc.

Chief Financial Officer Jim Bell has left, and the company said this week it had appointed former executive Jenna Owens as its chief operating officer.

“The hiring of Jenna Owens is viewed as very positive as GameStop is now becoming cutting edge and has leadership that could help transform the company,” said OANDA’s Moya, adding that the share price is likely ” have a wild consolidation “in the next two months.

The major Wall Street indices have had a rollercoaster ride when a jump in US government bond yields triggered a sell-off of riskier assets. [.N]

GameStop, which added three new directors, including Cohen, to its board in January as part of a deal, said in its annual regulatory filing here Tuesday that it expects eight incumbent board members to step down at its 2021 annual meeting in June.

Report by Susan Mathew in Bengaluru; Editing by Patrick Graham and Saumyadeb Chakrabarty


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