GameStop Stock Price Soaring
Gamestop stock price is soaring again after it plunges from its all-time high Reddit wallstreetbet short squeeze saga. The Stock price of Gamestop peaked at $347.51 on January 27 of this year. The stock drop to $40.59, its lowest since its peak on February 19. However, the stock has now rebounded, with a rally bringing its stock price to $123 as of writing this article.
Why GameStop Stock Price is Rising?
There is more than one reason responsible for this new surge in Gamestop stock price. Reddit’s Wallsteetbet, the subreddit that was responsible for its first rally is still a huge factor. However, the main reason might be due to the Company major shakeup.
The brick and mortar game retail store is reportedly firing or letting go of its current Chief Financial Officer Jim Bell. The company announces bill resignation will take effect on March 26. Reports suggest that Ryan Cohen and the board forced the move to accelerate GameStop’s move online. This, alongside the company closing multiple locations, send a strong message to hedgefund investors that the company will successfully transition into a Digital company. So a lot of retail investors and institutional investors are pouring money into Gamestop stock.
Ryan cohen push For GameStop to Become like Amazon
Ryan Cohen, the former CEO of Chewy, bought a large stake in GameStop with a vision of turning the company into the Amazon of the video game market. Ryan Cohen believes that GameStop’s brand and customer base gives it the leverage and means to turn itself around by shifting its focus from physical stores, toward building a robust e-commerce platform.
Cohen has a 9.98% ownership of GameStop at an average cost of $5.98, so he has adequate reasons to see GameStop succeed. Therefore, his push for the company to aggressively transform into an eCommerce business should not be surprising. Covid19 made it clear the digital transformation of the world economy is necessary and vital to brick and mortar companies’ survival in the coming years.
Going online is necessary for GameStop. The company can save money on rent, wages, etc. However, it still has some profitable stores that can remain open and be used as warehouses to store consoles and disc games to be sold via the online platform. This approach could make the company extremely profitable.