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Stock Market GameStop jumps 14% to resume its climb back to post-short-squeeze levels even as Wall Street recommends ‘sell’


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Stock Market GameStop jumps 14% to resume its climb back to post-short-squeeze levels even as Wall Street recommends ‘sell’

GameStop millionaire Roaring Kitty Roaring Kitty GameStop surged as much as 14% on Friday as it resumed its push to levels not seen since after the epic short-squeeze earlier this year.But Wall Street is not on board with the move, with the average analyst rating remaining a “sell.””We believe [the] rapid rise up in shares…

Stock Market GameStop jumps 14% to resume its climb back to post-short-squeeze levels even as Wall Street recommends ‘sell’

Stock Market

Stock Market GameStop millionaire Roaring Kitty
GameStop millionaire Roaring Kitty

Roaring Kitty

  • GameStop surged as much as 14% on Friday as it resumed its push to levels not seen since after the epic short-squeeze earlier this year.
  • But Wall Street is not on board with the move, with the average analyst rating remaining a “sell.”
  • “We believe [the] rapid rise up in shares is unwarranted, less about future prospects, and more of a statement about social & economic inequality,” CFRA said in a note on Wednesday.
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The meteoric rise in shares of GameStop continued on Friday, as the video game retailer surged as much as 14% on no official news.

In recent weeks, GameStop has gravitated towards the highs following its late January short-squeeze that saw shares briefly topped out at $483. On Friday, the stock hit a high of $295.50, giving it a market valuation of about $17 billion.

GameStop investors have latched on to the idea that activist investor and Chewy co-founder Ryan Cohen can transform the company into a specialized e-commerce company, and so has the board of directors. Earlier this week, GameStop said Cohen would lead a committee focused on expanding GameStop’s e-commerce capabilities.

But Wall Street analysts remain unconvinced and are sticking with their price targets that suggest more than 90% downside potential in the company.

CFRA maintained its Sell rating on GameStop but increased its price target to $16 from $7, according to a Wednesday note. CFRA highlighted that “no material changes” to its business model were conveyed in the recent announcement about Cohen leading a committee.

“We believe [the] rapid rise up in shares is unwarranted, less about future prospects, and more of a statement about social and economic inequality,” CFRA said, before drawing parallels to the 2011 Occupy Wall Street Movement and the recent rise in Reddit’s WallStreetBets forum.

“In our view, we’re witnessing a ‘Reoccupy GME’ movement, following Feb’s splintering off into silver, dogecoin, and other financial instruments,” CFRA said.

The Wall Street research firm said bearish catalysts that could weigh on GameStop’s share price going forward include earnings on March 23 and “developments in regulatory probe opposing investors,” according to the note.

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CFRA isn’t alone in its bearish view on GameStop. Bank of America reiterated its Sell rating on the company on Friday, and the average Wall Street analyst rating on the company remains Sell.

But those bearish views aren’t stopping investors from piling into the stock, which is up 1,280% year-to-date as of Thursday’s close.

Read more: Buy these 30 stocks poised to lead an electric-vehicle revolution that will account for 50% of new-car sales by 2030, UBS says

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