FOR IMMEDIATE RELEASE:
While Gamestop’s stock prices surge this week, very few believe it will last or will have any impact on the company’s day-to-day operations.
With close to 1900 locations across the United States, landlords with Gamestop locations have been watching the stock market closely over the past few weeks. Although Gamestop has not fundamentally changed the way they do business, their stock prices have soared by 2,752% since January 1.
On Thursday 1/28 GameSpot's stock hit an all-time high of $492.02 per share. On the morning of Friday 1/29, it jumped up another 75% to $341after falling overnight.
A Reddit thread known as r/WallStreetBets started the buying frenzy as a group of users set out to push their stock price higher while many on Wall Street were attempting to short the stock. This has created erratic price fluctuations, especially over the last week, causing several platforms to halt trading of the stock - most notable being the Robinhood app.
Robinhood explained their decision to restrict trading on their blog on 1/28. The company said "We continuously monitor the markets and make changes where necessary. In light of recent volatility, we restricted transactions for certain securities to position closing only.” While Gamestop was one such restriction, it also included AMC, Bed, Bath and Beyond, Nokia, and BlackBerry. Robinhood would later send an email saying it would instead allow "limited buys" of those securities starting Friday.
While there are some reasons investors could be genuinely interested in Gamestop, such as their recent announcement of Ryan Cohen joining the board of directors, there is little evidence to suggest that the current growth trajectory can be maintained. And the recent spike in Gamestop’s stock value won’t likely impact their store operations.
In fact, the brand has not stopped their previously announced plan from December of last year to close 1,000 locations by March. This comes after the brand has already shuttered 783 stores in the last 24 months.
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