As The GameStop Circus Moves On, Only The Share Price Remains Unusual

As The GameStop Circus Moves On, Only The Share Price Remains Unusual
Andrew Rummer

almost 3 years ago1 min

Mentioned in story

Four months after US video game retailer GameStop hit the public consciousness as the focal point of a battle between smaller investors and short-selling hedge funds, many metrics around the stock have returned to normal levels. Just one remains absurdly elevated: the price. 

As the chart above shows, both GameStop’s 30-day volatility (in blue) and its trading volume (in green) have dropped back to their historical averages after a crazy few months. Yet despite these signals that traders no longer have much interest in the company, its share price (in pink) is still sitting on an 800% gain for the year. 

This combination of data suggests the retailer’s stock price is being supported by investors who purchased shares as a way to stick it to the suits on Wall Street – a cohort who are reluctant to sell lest they let down their fellow “apes” on Reddit’s WallStreetBets forum. 

While GameStop still consistently tops charts of the most-discussed stocks on WallStreetBets, the rest of the world has moved on. The proportion of the company’s tradable shares sold short, for example, has plunged from 144% at the start of the year to just 20%. 

How much longer can GameStop’s shares remain at these levels before the company’s new diamond-handed investors eventually tire of owning stock in an unprofitable retailer?



All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG