The poster child of meme stock back in 2021 is at it again: Gamestop Corp (GME: US) stock price rose by almost 42.73% since the past 5 days. Previously, 2iQ research covered three high profile purchases by Gamestop’s insiders, including chairman Ryan Cohen.
As of the present day, the video-game retailer is still a heavily shorted stock. But Gamestop still has a huge online following which isn’t receding anytime soon and to add to it, the company made advancements in its operations this past week.
Short squeeze ongoing
GME’s stock price has been on a rollercoaster ride since Jan ‘21, where it was first granted the meme stock status. In 2iQ’s previous coverage dated March ‘22, the number of shares on loan were almost 21.6 million. Now, the number has risen ever so slightly to 22,462,644.
Back then, the short interest rate was approx. 28.60%. As of May 27, the short interest rate has risen to 29.42%.
Compared to our last report dated for March ‘22, GME’s value per share has fallen to $81.33 but soared by 68.71% since then. As of May 27, the stock price closed at $137.21.
Company advances while Hedge Fund suffers
On May 18, Melvin Capital made headlines when after a past as one of the most eminent hedge funds on Wall Street, was headed for liquidation. The New York-based hedge fund was betting against Gamestop in January 2021, but the tide turned against them when GME amassed an online following began buying the stock. Founded in 2014 by businessman Gabe Plotkin, the latter announced that he was planning to shut down Melvin and return cash to investors.
In the start of the month, the NFT market was experiencing a boom like no other. At the same time however, an article mentioned that NFT sales had declined 92% since Sep ‘21. Ironically, just last week GameStop was the latest in video game companies which chose to dip into the NFT pool. On May 23, the company announced the launch of its crypto wallet for its users to store their cryptocurrencies and NFTs across several apps.
While some may still view GameStop’s stock as overvalued and its niche, video-game retailing, to be close to out of business, GameStop still has plenty of locations in America to its name. Post the pandemic, gamers still gather in these locations and socialize as per a journalist’s personal experience. According to the latter, betting against Gamestop at present won’t do any good, taking Melvin Capital as an example.