GME Stock Price and News: GameStop Corporation GME back below $200
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UNLOCK OFFER- Gamestop shares continue to retreat from highs as meme suffers.
- Gamestop results will be out on Tuesday, March 24.
- Gamestop investors hope the digital strategy will pay off.
Update March 16: Gamestop shares are trading at under $200 for the first time since March 8th as the meme stock king continues to retreat from highs above $350 set on March 10. The technical setup looks negative as this spike set a lower high than the original spike in January. Gamestop releases results on Tuesday March 23rd.
Update March 10: GameStop Corp (NYSE: GME) shares opened sharply higher and extended the rally during the first half of the session. After surging to its highest level since January 29 at $348.50, however, the stock staged a sharp U-turn and dropped all the way to $172 before returning into the positive territory. As of writing, GME was up 9% on a daily basis at $270. During the sharp fluctuations, the New York Stock Exchange (NYSE) halted trading in GME shares several times. In the meantime, the broader market mood remains upbeat with the S&P 500 Index clinging to strong daily gains above 3,900 as investors largely ignored the outcome of the 10-year US Treasury note auction.
Gamestop (GME) just loves the attention and refuses to go quietly into the night. I'm sure many shorts and regulators would wish for GME to just move swiftly on but it refuses to so. In the process, changing the way traders and investors think and reinforcing the power of group and retail sentiment. A whole new social trading dimension has just been unleashed on the once-staid Wall Street stock market and things may never be the same again.
Ok, so a brief recap just in case you missed it!
Gamestop is/was a struggling online video game retailer with shops located all around the world selling yes you guessed it, video games. Well as we all know retail is a struggling space as online continues to take over and this has been a trend for Gamestop too. As a result, Gamestop was heavily shorted by hedge funds as they bet that the price would decline further.
Gamestop's share price had been languishing below $10 for a considerable time and hit $2.57 by early April 2020 as the global pandemic raged. From here Gamestop staged an impressive recovery, in line with global stocks. GME shares just reached $20 before 2020 was done.
From here it gets interesting though as the power of retail suddenly became a force that could not be ignored by Wall Street. /wallstreetbets is a Reddit community for stockmarket talk and Gamestop started to trend heavily on the site early in 2021. Gamestop ran and ran and eventually exploded as talk of squeezing hedge fund short positions fizzed and exploded into mainstream consciousness. Gamestop shares traded up to nearly $500.
The Robinhood saga then tempered things with multiple brokers placing restrictions on purchases of Gamestop and other retail meme stocks. Gamestop shares collapsed down to below $100 in a matter of days.
Since then the shares consolidated around the $60-80 range before exploding again in late February to break up to $184.
The catalyst was the CFO stepping down and then Ryan Cohen reportedly leading GameStop's digital transformation strategy, helping in the search for a Chief Technology Officer. Cohen has previously transformed Chewy from retail into e-commerce, so investors see similar potential now that he has got his head in Gamestop.
GME Stock dividend
Now this question has been popping up recently as holders increasingly wonder if there is anything else there for them as if stellar gains aren't enough! Well, the answer is Gamestop hasn't paid a dividend for nearly two years, March 2019 being the last payout ($0.38). So investors are wondering whether, given the recent stock price surge, dividends will be restarted?
I doubt it. Dividends are usually paid out by companies that are well established and have strong cash generation to reward investors' loyalty. Gamestop needs cash to fund its digital strategy and not to pay a dividend. Shareholders will most likely back this strategy as that has been the main catalyst for the GME share appreciation, along with a short squeeze!
Generally, strong growth companies don't pay a dividend, preferring to reinvest any cash into further growth. GameStop will be hoping to pursue a similar strategy. Given the share price appreciation, it may want to examine a capital raise to fund the digital transformation strategy, as many Wall Street commentators urged GME to do so. Other retail interest companies, such as AMC, which have seen a surge in their share price have done this in 2021. Gamestop reportedly did examine the possibility of a share offering to raise cash but decided it couldn't do so due to SEC rules around selling shares before updating investors on earnings, according to Reuters, citing sources.
Gamestop is due to release Q4 2020 earnings on Tuesday, March 23 after the close.
Previous updates
Update: Is this time for real? GameStop Corp (NYSE: GME) has been extending its gains, rising 17% to $290 at the time of writing and building on Tuesday's advance. While this kind of moves may cause altitude sickness for those trading blue chips, it looks moderate for those trading the poster child of "meme stocks." While retail traders are enthusiastic, there may be a better foundation for shares to extend their gains. The 52-week high was $483, in the mad days of late January.
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
- Gamestop shares continue to retreat from highs as meme suffers.
- Gamestop results will be out on Tuesday, March 24.
- Gamestop investors hope the digital strategy will pay off.
Update March 16: Gamestop shares are trading at under $200 for the first time since March 8th as the meme stock king continues to retreat from highs above $350 set on March 10. The technical setup looks negative as this spike set a lower high than the original spike in January. Gamestop releases results on Tuesday March 23rd.
Update March 10: GameStop Corp (NYSE: GME) shares opened sharply higher and extended the rally during the first half of the session. After surging to its highest level since January 29 at $348.50, however, the stock staged a sharp U-turn and dropped all the way to $172 before returning into the positive territory. As of writing, GME was up 9% on a daily basis at $270. During the sharp fluctuations, the New York Stock Exchange (NYSE) halted trading in GME shares several times. In the meantime, the broader market mood remains upbeat with the S&P 500 Index clinging to strong daily gains above 3,900 as investors largely ignored the outcome of the 10-year US Treasury note auction.
Gamestop (GME) just loves the attention and refuses to go quietly into the night. I'm sure many shorts and regulators would wish for GME to just move swiftly on but it refuses to so. In the process, changing the way traders and investors think and reinforcing the power of group and retail sentiment. A whole new social trading dimension has just been unleashed on the once-staid Wall Street stock market and things may never be the same again.
Ok, so a brief recap just in case you missed it!
Gamestop is/was a struggling online video game retailer with shops located all around the world selling yes you guessed it, video games. Well as we all know retail is a struggling space as online continues to take over and this has been a trend for Gamestop too. As a result, Gamestop was heavily shorted by hedge funds as they bet that the price would decline further.
Gamestop's share price had been languishing below $10 for a considerable time and hit $2.57 by early April 2020 as the global pandemic raged. From here Gamestop staged an impressive recovery, in line with global stocks. GME shares just reached $20 before 2020 was done.
From here it gets interesting though as the power of retail suddenly became a force that could not be ignored by Wall Street. /wallstreetbets is a Reddit community for stockmarket talk and Gamestop started to trend heavily on the site early in 2021. Gamestop ran and ran and eventually exploded as talk of squeezing hedge fund short positions fizzed and exploded into mainstream consciousness. Gamestop shares traded up to nearly $500.
The Robinhood saga then tempered things with multiple brokers placing restrictions on purchases of Gamestop and other retail meme stocks. Gamestop shares collapsed down to below $100 in a matter of days.
Since then the shares consolidated around the $60-80 range before exploding again in late February to break up to $184.
The catalyst was the CFO stepping down and then Ryan Cohen reportedly leading GameStop's digital transformation strategy, helping in the search for a Chief Technology Officer. Cohen has previously transformed Chewy from retail into e-commerce, so investors see similar potential now that he has got his head in Gamestop.
GME Stock dividend
Now this question has been popping up recently as holders increasingly wonder if there is anything else there for them as if stellar gains aren't enough! Well, the answer is Gamestop hasn't paid a dividend for nearly two years, March 2019 being the last payout ($0.38). So investors are wondering whether, given the recent stock price surge, dividends will be restarted?
I doubt it. Dividends are usually paid out by companies that are well established and have strong cash generation to reward investors' loyalty. Gamestop needs cash to fund its digital strategy and not to pay a dividend. Shareholders will most likely back this strategy as that has been the main catalyst for the GME share appreciation, along with a short squeeze!
Generally, strong growth companies don't pay a dividend, preferring to reinvest any cash into further growth. GameStop will be hoping to pursue a similar strategy. Given the share price appreciation, it may want to examine a capital raise to fund the digital transformation strategy, as many Wall Street commentators urged GME to do so. Other retail interest companies, such as AMC, which have seen a surge in their share price have done this in 2021. Gamestop reportedly did examine the possibility of a share offering to raise cash but decided it couldn't do so due to SEC rules around selling shares before updating investors on earnings, according to Reuters, citing sources.
Gamestop is due to release Q4 2020 earnings on Tuesday, March 23 after the close.
Previous updates
Update: Is this time for real? GameStop Corp (NYSE: GME) has been extending its gains, rising 17% to $290 at the time of writing and building on Tuesday's advance. While this kind of moves may cause altitude sickness for those trading blue chips, it looks moderate for those trading the poster child of "meme stocks." While retail traders are enthusiastic, there may be a better foundation for shares to extend their gains. The 52-week high was $483, in the mad days of late January.
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
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