GameStop Shares Soar Following Volatile Monday Morning
GameStop shares are continuing their wild ride, having already doubled in a week, but certain analysts advise caution.
The video game retailer’s stock has gained more than 140% in morning trading on Monday and then fell, turning negative. Shares were last seen up around 11% for the day.
Earlier this month, GameStop said Chewy Inc co-founder and former CEO - Ryan Cohen would join its board, giving rise to hope he would push for a strategy change. The piece of news led to some serious buying in the stock as hedge funds and traders tried to cover their short bets. The shares are up 2,962% over one year.
"The sudden, sharp surge in GameStop's share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors. We believe the current share price and valuation levels are not sustainable”, Telsey Advisory Group commented, having downgraded their rating on the company’s shares to underperform from outperform.
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