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.
Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.
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