Tuesday Jan 26 2021 15:14
2 min
Shares in GameStop Corp. (GME) surged another 80% on Monday as the stock’s breakneck ascent continued amid frenzied retail trading activity. The stock jumped to over $101 in early trade, hitting a session high before jumping again to $119, having been worth as little as $6 four months ago.
GameStop is the latest stock to benefit from intense retail interest among stock day traders and is a popular topic on Reddit, where many on the ‘wallstreetbets’ thread are backing the stock. In fact, it’s become the number one topic on the /r/wallstreetbets subreddit site, which has 2m members.
The rally came despite a double-downgrade from Telsey Advisory Group, which slashed its rating on the stock to underperform from outperform, noting a basic disconnect between fundamentals and valuation. “The sudden, sharp surge in GameStop’s share price and valuation likely has been fuelled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors on forecasts for the new gaming cycle and the involvement of activist RC Ventures,” the analyst note said.
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