Is Gamestop a Buy at $155?
Popular meme stock GameStop’s (GME) shares skyrocketed in price earlier this year. However, the stock tumbled to a multi-month low last week. But the stock’s price jumped in its last trading session, closing the session at $155.64, fueled by what the chief strategist at Interactive Brokers (NASDAQ:IBKR) characterized as a “classic meme stock rally.” The company also recently posted bigger than expected quarterly losses. So, will GME be able to pull off another rally, or will the share price retreat again? Read on.Video game retailer GameStop Corp . (NYSE:GME) in Grapevine, Tex., provides games and entertainment products through its e-commerce properties and various stores in the United States, Canada, Australia, and Europe. GME shares skyrocketed earlier this year, driven by retail investors on forums such as Reddit’s WallStreetBets and easy-to-access platforms like Robinhood Markets , Inc. (NASDAQ:HOOD). But the stock tumbled to multi-month lows on December 13. GME shares have slumped 25.9% in price over the past month to close the last trading session at $155.64. However, the stock is still up 949.5% for the year and 726.1% year-to-date.
Randy Frederick, managing director of trading and derivatives at Charles Schwab (NYSE:SCHW) in Austin, Texas, explained the recent dip saying, “People that have been investing in meme stocks have all their money in the market, and there’s not any more left.” Furthermore, traders are shifting away from riskier assets in the year’s final weeks, which might have triggered the sell-off in GME last week.
However, GME shares soared 7.6% intraday in the last trading session. The record-setting release of movie Spider-Man: No Way Home helped the two best-known meme stocks, AMC Entertainment Holdings, Inc. (NYSE:AMC) and GME, to end the week on a positive note. The rise in AMC had triggered the rally in GME. “It’s a classic meme stock rally,” Steve Sosnick, chief strategist at Interactive Brokers, surmised.
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