The brief return of GameStop (NYSE:GME) as a meme stock may have just fizzled out. While it saw substantial gains this morning, that rally promptly lost traction amid trading volume that was double the normal levels. As a result, GameStop shares were down over 13% in the closing minutes of Monday’s trading session.
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One of the biggest catalysts behind this bizarre, sputtering rally came from Keith Gill, otherwise known as Roaring Kitty, who posted a livestream in which he offered strong—and some might say “unaccountable”—praise for current GameStop CEO Ryan Cohen. Gill declared that Cohen was “doing the right things” and that he “reserves…right to change (his) mind…” about GameStop. Meanwhile, GameStop released a plan to sell 75 million shares to augment its already formidable cash position, said to be around $4 billion. It also released an earnings report that featured plunging revenues.
But What Is It Doing?
That $4 billion is sparking speculation of its own. Cohen now has the right to make investments with that money. Thus, he could be considering a merger or acquisition that would allow GameStop to better take advantage of all that real estate that it’s got sitting around in just about every shopping center in a town big enough to command at least three traffic signals. It’s also worth noting that the GameStop cryptocurrency, GME, recently overtook Dogecoin (DOGE-USD), thanks largely to a surge in social media discussions around the topic.
Is GameStop a Buy, Sell, or Hold?
Turning to Wall Street, only one analyst is covering GME stock, and that’s Michael Pachter with Wedbush Securities. Pachter has a Sell rating on GME stock. After a 1.15% rally in its share price over the past year, the GME price target of $13.50 per share implies 45.72% downside risk.
