Gamestop’s ongoing soaring
The price of the Gamestop share has risen sharply again. Analysts even see substance. Meanwhile, the short sellers have lost billions.
SFor the fifth day in a row, the price of the American video game chain Gamestop rose on Tuesday and closed trading at $ 246.90, which is around 27 percent up. The day before, the company announced that it had hired activist investor Ryan Cohen to convert it into an e-commerce company.
Since February 23, the price has now risen five and a half times. For Ipek Ozkardeskaya, senior analyst at Swissquote Bank, part of a risk rally that also caused the price of the electric car manufacturer Tesla to rise by 20 percent on Tuesday.
In fact, Ozkardeskaya even sees a basis for this rally. The risk rally only made it easier for risk-conscious investors to jump on the bandwagon with verve. The second wave of speculation is supposed to be rolling and could carry the price above the $ 350 that it had reached in the course of the first wave.
The support of the day traders, in turn, will make it easier for Cohen to achieve his goals. In the long term, Gamestop could actually become a success story, because the restructuring is going in the right direction. The switch to online trading is out of the question for a retailer, especially if he sells computer games. The latest eddy made Gamestop known to investors and that changes a lot. Gamestop’s shares could definitely spice up a technology portfolio at reasonable prices.
However, Ozkardeskaya puts this reasonable price at around $ 80 to $ 100, less than half the current rate. Given the massive volatility of the share, the risk is also high. The current price rally is based on growth expectations and not on concrete results. This would put the price gains on smooth ground and if the current rally runs out of steam again, there will probably be an extensive correction.
It would hardly be the first time that great expectations that no established retailer succeeds as an online retailer have not been fulfilled. That was also the case in the early days of the Internet. When Amazon.com was just a small online bookseller at the end of the 1990s, many investors were betting that the company would not be able to hold its own against the large online bookseller Barnes & Noble. As we all know, that was a mistake. Other bookstores never succeeded either. And branch fashion retailers also follow the Zalandos of this world.
The short sellers of Gamestop have meanwhile apparently burned their fingers badly with the bet on falling prices. According to the data provider Ortex, their losses over the year to date have amounted to around eleven billion dollars. By contrast, bets on a decline in Tesla’s share price would have paid off at least until Tuesday with profits totaling around $ 4.2 billion.