GameStop Shares Hold Firm Even As Media Interest Wanes

GameStop Shares Hold Firm Even As Media Interest Wanes
Andrew Rummer

almost 3 years ago1 min

Mentioned in story

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.

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