GameStop’s Roller Coaster Ride Resumes
GameStop GME +35.7% had another huge move up on Wednesday after the company announced the CFO was resigning the company. Normally a stock declines when a CFO suddenly departs but GME increased over 100% yesterday, moving from $44.97 to $91.71, an increase of 104%. It continued the move in the after-market, rising $76.29 to $168, up an additional 83%. The market cap at Wednesday’s close was $6 billion and in the after-market was $11 billion.
The Wall Street Journal reported that, “GameStop’s finance chief was forced out of his role as activist investor Ryan Cohen pushes for a digital transformation of the ailing videogame retailer.” In this type of situation it could make sense for a stock to move higher but not to double. Wednesday’s rebound and the follow-through in the after-market is probably being driven by the Reddit crowd. They need to be very wary of another steep rise followed by another sharp fall.
