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GameStop shares fell on Tuesday at mid-morning.
Michael M. Santiago / Getty Images
GameStop
shares fell again shortly after the market opened on Tuesday. While some short-term sellers seemed to cover their bearish bets in recent weeks, a short-selling expert said he still sees great potential for expression.
Shares fell 19% to $ 178.12 around 10:30 p.m. These levels continue to be multiples above the one-year stock lows of $ 2.57.
This was stated by Ihor Dusaniwsky, CEO of the analysis firm S3 Partners De Barron on Monday, his company estimated that about 8.98 million GameStop shares (ticker: GME) were recently sold, about 16% of the shares available for trading.
Dusaniwsky said that over the past month, his company has seen some 7.5 million shorts covered, meaning that bearish investors bought shares to cover their bets. The bulk occurred last week, when 4.6 million shares were covered.
“GME shorts go on a short budget and stocks remain among the top of our short compression potential metric, which means they will likely continue if the stock price stays at those levels or higher,” he said. Dusaniwsky added.
The company’s shares rose last week following the company’s announcement that Chewy co-founder Ryan Cohen chaired a board committee aimed at transforming the retailer into a tech business. Cohen joined the board with two associates in January, and began the parabolic rise of GameStop.
GameStop said it will report fourth-quarter fiscal results on March 23. Analysts expect adjusted earnings of $ 1.35 per share, up from $ 1.27 per share in the previous fourth fiscal quarter, according to FactSet. Of course, analysts are much more bearish on GameStop than retail investors posting on Reddit’s WallStreetBets forum. The highest price target shown on FactSet is $ 33, while the average target is $ 14.64.
While the short-term results could cool GameStop’s concentration, stock enthusiasts are looking forward to the future. If the company provides optimistic color in its e-commerce efforts and in the impact of new gaming consoles, it could make quarterly failures more enjoyable.
Write to Connor Smith to [email protected]