GameStop, the largest gaming retailer, is a leading example of the mediocre performance of game stocks. The company posted $8.29 billion in revenue for fiscal year 2019, but that figure fell to $6.8 billion this year and is expected to decline to $5.78 billion by 2022. This slow decline in profits is responsible for the low EPS rating of GME stock. However, retail traders on Reddit will continue buying GME stock despite the current situation. They will add to their positions and encourage each other to hold on to their positions.
The SEC is currently investigating the reasons behind the dramatic price swings in GME stock, including frequent Reddit mentions, significant mainstream media coverage, and elevated short interest. The SEC is still studying various aspects of market structure, regulatory framework, digital engagement practices, and payment for order flow. The SEC is also examining dark pool trading and short selling. Traders are focusing on the underlying causes of these swings, as well as identifying what caused the volatility.
As of 3 February 2021, the SEC is still studying the market structure and the market dynamics behind GME stock’s big swings. Some of the factors that are driving GME’s rapid price increases include frequent Reddit mentions, significant mainstream media coverage, large volume changes, and elevated short interest. The SEC is also considering the payment for order flow and the use of dark pool trading, as well as the market dynamics of short selling.
There are several reasons for the sudden volatility of GME stock, and the SEC is investigating the price swings. Some of the factors are frequent mainstream media coverage, high volume changes, and elevated short interest. However, many questions remain about the market structure, regulatory framework, and digital engagement practices. The SEC is also looking into the practice of short selling, which is a new development in the market. And since the SEC’s report, the stock is now up 11% in pre-market trading.
In addition to the SEC’s investigation, the price of GME stock continues to rise. This company’s meme stock has increased by 36.6% since May 12 and is up nearly 50% from its $161 level. Meanwhile, Dogecoin has declined 64% in the last year, despite the popularity of the cryptocurrency. These two factors are affecting the price of GME and other stocks in the market. Besides, the SEC is also examining how the stock is structured and regulated.
Despite the recent high and low of GME stock, there are still a few signs of life. During January 2021, the company announced three new members to its board, including former Chewy executives Ryan Cohen and Michael Scanlan. In addition to these positive signs, a recent SEC report on GME shares shed light on the trading activity of hedge funds. As a result, the firm’s IPO, notably its NASDAQ-listed share price, is largely due to its booming short positions.