GameStop Stock Blindsided By CEO Split

It's been a rough year for GameStop

May 11, 2018 at 1:37 PM
facebook twitter linkedin

GameStop Corp. (NYSE:GME) keeps getting hammered. The shares of the video game retailer have given back roughly half their value over the past 12 months, and today they're trading down 3.7% at $12.55, after the company announced the resignation of CEO Michael Mauler, who just took the position in February. Co-founder Daniel DeMatteo was named interim CEO, effective immediately.

Telsey Advisory lowered its opinion on GME shares even before the news broke this morning, dropping its price target to $15 from $17. Loop Capital, meanwhile, said a management shake-up is "the last thing GameStop needs." Still, the brokerage firm maintained its "hold" assessment, citing the stock's extremely low valuation.

Some options traders are staying optimistic, too. There appears to be buy-to-open activity at the October 12 and May 12.50 calls today, which would be bets on more upside in the months ahead. This is nothing new, though, as call buying was more popular than put buying during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Some of the recent call activity could have been from short sellers, who continue to target GME. Short interest rose another 25.6% in the past two reporting periods, and now accounts for 41.6% of GameStop's float. As such, unusual buying at out-of-the-money calls could be attributed to hedging from these bears.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1