almost 3 years ago • 1 min
Shares of GameStop, the US video game retailer that became the center of a trading frenzy, have succeeded in holding onto a 10-fold gain this year even after the attention of the world’s media moved on.
The chart shows how both the share price (in orange) and mentions of GameStop in the press (in white) surged higher in January, moving virtually in lockstep. But while media reporting volume has since dropped back, the stock is still going strong.
It’s not just the staid old “mainstream media” whose attention has strayed either. According to data provider Quiver Quantitative, mentions of GameStop on the WallStreetBets Reddit forum have dropped to a few hundred a day from nearly 20,000 a day at the peak of GameStop mania in late January and early February.
After a near-900% surge in 2021, GameStop stock now trades with a valuation of 168 times estimated profits. That compares with a valuation of 23.5 for the benchmark S&P 500 index as a whole.
While it appears GameStop has enough investors willing to hold onto the shares despite the rally, the company itself has started to cash in. On Monday, GameStop announced a program to sell up to $1 billion of additional stock to hasten its shift to online retail. It had previously refrained from offering any new shares for sale, despite the huge increase in their value.
We’ll have to see if GameStop’s shareholders one day tire of the company as traditional and social media have – or if GameStop as an investment has more shelf life than GameStop as a news story or meme.
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.