GME Eyes Annual Highs After Top Investor Ups Stake

The equity is up over 77% in 2020

Deputy Editor
Sep 22, 2020 at 9:54 AM
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The shares of GameStop Corp. (NYSE:GME) just topped the elusive $10 mark for the first time in over 17 months this morning, after Ryan Cohen -- the company's biggest individual investor, and founder of pet supply e-tailer Chewy (CHWY) -- raised its stake in the video game retailer from 9.6% to 10%. Cohen revealed that he is in active discussions with GameStop's management and board members and promised to be more involved in pushing GME toward changes, including a broadening of its online product category and head-to-head competition with e-tail giants, including Amazon.com (AMZN). 

The stock is up 21% at $10.59 at last check, eyeing its best day in over a week. The once-struggling video game stock has enjoyed a recent breakout, actually, toppling former pressure at its 320-day moving average before eclipsing both its May 2019 bear gap, and its pre-pandemic highs. Now, GME is up over 77% for the year. 

Analysts still aren't convinced, which could leave the door open for bull notes, should this positive price action continue. Just two call GME a "strong buy," while four say "hold" or worse. Plus, the 12-month consensus price target of $6.20 is a 29.1% discount to last night's close.

Option traders, on the other hand, are gravitating toward bullish bets. In the past 10 weeks, 3.15 calls were picked up for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher  than 99% of readings from the past year, suggesting a healthier-than-usual appetite for long calls of late. 


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