Insider Trading: GameStop Stock (GME) Surges on CEO’s $10.8M Share Purchase

GameStop (GME) stock gained over 3% in after-hours trading on Thursday. The upside came after CEO Ryan Cohen disclosed the purchase of 500,000 shares of the company, valued at $10.8 million. The move points to his confidence in the video game retailer’s future growth.

With this acquisition, Cohen’s stake in GME stock increases to 37.3 million shares, reflecting an 8.4% ownership in the company.

Share Purchase Follows GameStop’s Volatile Week

This news comes amid a volatile period for GameStop. Last week, the company’s board approved to include Bitcoin in its investment policy, leveraging its $4.76 billion cash reserve. This decision initially attracted investor interest, pointing to GameStop’s efforts to diversify and explore new avenues for growth.

However, this positive sentiment was tempered by a $1.5 billion private offering of convertible senior notes. The company plans to use the proceeds for general corporate purposes, including Bitcoin purchases.

Further, Cohen’s stake increase coincides with GameStop’s efforts to adapt to the changing gaming landscape, which has seen declining sales and increased competition from digital platforms.

Wedbush Analyst Remains Bearish on GME Stock

Earlier this week, Wedbush analyst Michael Pachter raised GameStop stock’s price target to $13.50 (implying 36% downside potential) from $11.50 but maintained a Sell rating. The analyst raised questions about GameStop’s Bitcoin strategy.

Pachter questioned why investors would pay over twice the company’s cash value just for the potential to convert that cash into Bitcoin, especially when they could directly invest in Bitcoin or Bitcoin ETFs themselves.