The memes actions were the big stars at the beginning of years and already reaching the end of 2021 one of them, GameStop-A, keeps its price stable near the 200 dollars defying expectations that earnings would be short-lived according Karen Langley y Caitlin McCabe en The Wall Street Journal.
The stock has traded in a range from a minimum from around 170 dollars up to a maximum approximately $ 220 since the end of August.
What can we expect for quarterly earnings?
At the close of this Wednesday, GameStop will have presented its quarterly earnings.
The firm has reported earnings in just one of your last six fiscal quarters. In the three months ending July 31, the company posted a loss of $ 61.6 million. The company has dealt with a change of video game consumers toward purchasing games through digital downloads, rather than the hard copies that he specializes in. The company’s share price is still well above what might be expected from a company without consistent earnings.
The relative stability of the stock has been a surprising turn of events, a company widely credited with the unleashing meme stock mania which has taken over the markets this year. While interest in many other stocks has risen and fallen after the attention of individual investors, GameStop, on the other hand, has had a more constant support. Many individual investors say they continue to own stocks they bought earlier this year, with some betting on the leadership of Ryan Cohen, the new president of the company.
How did the value evolve?
In January, individual investors took over GameStop shares, in part in response to a high level of short selling. Short sellers bet against a company by borrowing shares and selling them, with the intention of buying them back later at a lower price.
From mid-August 2020 to the beginning of this year, more than 100% float, shares that can be traded freely, were sold short based on data from S3 Partners.
As the share price skyrocketed, short sellers had to buy the shares to limit their losses. The short interest level plummeted. In early February, around 42% of float of the stock was sold short. In recent months, that figure has ranged from 10% and 12%.
“GameStop short sellers have suffered market value losses of $ 6.22 billion in 2021 “, according Ihor Dusaniwsky, Head of Predictive Analytics at S3 Partners.
“GameStop investors, sometimes dubbed ‘apes,’ continue to hold the shares in a showdown with the remaining short sellers,” he said. Michael Pachter, Wedbush Securities analyst. “The demand for the stocks is keeping it there because the apes are convinced the shorts will keep piling up.”
Individual investors have continued to invest money in the stocks, totaling almost $ 669 million net by 2021, according to data up to December 6, flow trackerVanda Research, VandaTrack.
They continue to chat about the shares in the social media platforms. Many still encourage stocks and encourage others to buy or hold. “
GameStop was the 3rd most mentioned action on Reddit’s WallStreetBets forum in the period of 24 between Monday and Tuesday afternoon “, according to SwaggyStocks, a website that tracks stock mentions and sentiment on the subreddit.
And while most of the strong buying activity from individual investors occurred earlier this year, VandaTrack data shows that the group also Has largely avoided selling, with most trading days seeing net inflows in stocks.
November marked the first month that individual investors took more money out of GameStop than they put in, and investors sold nearly $ 1.3 million net during the month, as shown by data from VandaTrack. However, the stock has already recouped those losses in the first four trading days of December.
For two periods in October and again on Monday, GameStop shares fell toward or slightly below the $ 170 mark before reversing direction and rising.
“That pattern could be prompting investors to bet that when stocks fall to that level, it will rally higher,” he said. Matthew Tuttle, Chief Executive Officer and Chief Investment Officer, Tuttle Capital Management, who has previously owned GameStop shares in an exchange-traded fund.
“These guys look at the charts and see, hey, every time it hits 170, it bounces,” Tuttle noted.
GameStop is still trading above $ 170 and the Ei indicators are practically bearish.