The stock price of GameStop, an American video game, consumer electronics, and gaming merchandise retailer headquartered in Grapevine, Texas, United States, jumped by almost 80 percent on Friday following the surge in short-sellers and amateur traders interest in the once struggling video company.
GameStop, whose 5,509 retail stores spread across the United States, Canada, Australia, New Zealand, and Europe as of February 1, 2020, struggled for sales during the lockdown. However, it has found interests in amateur retail traders that are predicting that the gradual reopening of the economy due to COVID-19 vaccine distribution would boost the company’s sales in 2021.
Operating mainly under the GameStop, EB Games, ThinkGeek, and Micromania-Zing brands, GameStop has gained 245 percent in 2021 alone and could do as much as 30 percent today in US premarket trading.
According to Kim Doo-yong, chief executive officer at Must Asset Management, a Korean hedge fund that invested in GameStop and had a 4.7 percent stake in the company as of April 2020, Must Asset management is now less bullish on GameStop due to its volatile and unpredictable nature.
“We have become less bullish and turned more neutral on GameStop,” Kim said in an interview with Bloomberg on Monday. “This stock will continue to be very volatile and unpredictable in the short term.”
He, however, said “We are still very positive about the new management at GameStop. We believe Ryan Cohen and his team can repeat the success he realized at Chewy.com.”
Ryan Cohen co-founder of Chewy.com that was sold for $3.35 billion in 2017 invested $76 million in GameStop, the amount has now risen by 400 percent to over $380 million, according to a SEC filing.