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GameStop's Price Madness


GameStop’s Price Madness


GameStop’s stock price has risen dramatically due to what is known as a “Short Squeeze”. The reason why some investors were shorting the stock is because GameStop’s business is going the way of Blockbuster – why go to GameStop when I can download my games directly. This thesis is shown in revenue dropping 30% last quarter. Today the options market is demanding huge premiums to buy an option. This amount of heightened volatility is a sign of risk. Young investors buying the hype from sites like Reddit and Robinhood should be cautious when ‘jumping on the bandwagon”.

Written by

James E. Gore, CFA®, CAIA, CMT®

Jim serves as the Chief Investment Officer of THOR, is a Chartered Financial Analyst charter-holder, a Chartered Alternative Investment Analyst, a Chartered Market Technician, a member of the Association for Investment Management and Research and a member of the Cincinnati Society of Financial Analysts.

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