why-gamestop-stock-soared-67%-in-august

Why GameStop Stock Soared 67% in August

What happened

(NYSE: GME) shares far outpaced a booming market last month, soaring 67% compared to the S&P 500‘s 7% increase, according to data provided by S&P Global Market Intelligence.” data-reactid=”13″ type=”text”>GameStop (NYSE: GME) shares far outpaced a booming market last month, soaring 67% compared to the S&P 500‘s 7% increase, according to data provided by S&P Global Market Intelligence.

That sharp move higher pushed the specialty retailer’s stock into positive territory year to date after having declined by more than 50% earlier in 2020.

Two kids sitting in between a coffee table and a couch holding video game controllers and smiling

Image source: Getty Images.

So what

nearly 10% of GameStop’s outstanding shares. The stock’s jump was likely amplified by short-sellers closing their positions, which can create a large price spike known as a “short squeeze.”” data-reactid=”32″ type=”text”>The rally, which has continued into early September, came following news that a large institutional investor is actively buying the stock and has already accumulated nearly 10% of GameStop’s outstanding shares. The stock’s jump was likely amplified by short-sellers closing their positions, which can create a large price spike known as a “short squeeze.”

Now what

The new shareholder may use its influence to agitate for a management shake-up, but that’s not a sure bet. In the meantime, investors will be watching GameStop’s upcoming earnings report, which is set for Sept. 9. That announcement should show improving — but still sharply negative — sales trends in the fiscal second quarter.

retailer can return to a consistent growth profile as consumers reduce shopping trips and the stampede toward digital game purchasing continues.” data-reactid=”35″ type=”text”>GameStop is aiming to stay profitable in fiscal 2020, which would be an impressive achievement given widespread temporary store closures tied to the COVID-19 pandemic. The bigger question is whether the retailer can return to a consistent growth profile as consumers reduce shopping trips and the stampede toward digital game purchasing continues.

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  • Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.” data-reactid=”44″ type=”text”>Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

    Why GameStop Stock Soared 67% in August was originally published by The Motley Fool” data-reactid=”45″ type=”text”>Why GameStop Stock Soared 67% in August was originally published by The Motley Fool

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