Business & Investment

GameStop shares fall while the SEC is investigating trading activity

GameStop shares were 27% on Thursday after video game retailers announced plans to issue new shares and revealed that the US Securities and Exchange Commission is investigating the trading activity of their shares. It has fallen.

One of the first companies to become a popular so-called meme stock in the retail industry in January, the SEC helped staff investigate stock activity on May 26 after the market closed on Wednesday. He said he asked. GameStop said it did not expect the investigation to “harm us” and plans to “work fully with the SEC on this issue.”

Retailers also said they plan to register up to 5 million additional shares in the SEC, which, if issued, would dilute the value of current investors’ shares.

“It’s a normal feeling, as stock prices should go down when diluted for shareholders. Other than that, GameStop is trading in a dream with Pixie Dust,” said Loop Capital Managing Director, which covers the gaming industry. Said Anthony Chukmba.

“The stock has been completely separated from the fundamentals and it hasn’t changed. So whatever GameStop reported yesterday, it makes no difference to Reddit traders.”

GameStop’s stock, and a few other retail-popular stocks, have bounced back in the last two weeks as amateur investors renewed their trading enthusiasm earlier this year. At the end of January, retailers organized on online messaging boards and succeeded in inflicting losses on hedge funds betting on GameStop by pushing up their shares.

However, industry experts suggest that the recent rate of change in a company’s reputation for retail favorites suggests that more damaging investors are now joining along with individual investors. I point out.

“Retailers can’t trigger these sharp moves alone,” Chukmba said. “Hedge funds are not stupid. Many people understand this game and how to take advantage of it.”

Despite the fall on Thursday, data providers said that chatting about GameStop on the Reddit messaging board was modest compared to other popular stocks. Again, this suggests that retail investors may not be very aggressive about this latest decline.

According to data provider Breakout Point, the company has been ranked at the bottom of the top 10 most discussed stocks on the platform. “It’s surprisingly few. They’re not so excited and not so angry,” said Ivan Cosovic, founder of Breakout Point.

Retail activity has cooled in the months following the first surge in stocks at GameStop and other companies, but has risen again in recent weeks, led by movie chain AMC Entertainment. Last Wednesday, AMC shares rose 95%.

On Thursday, AMC also fell more than 13% in New York. Its inventories have increased by more than 2,000 percent since the beginning of the year. GameStop has risen by more than 1,177 percent since the beginning of the year.

So far, the resurgence of the retail trading boom has not affected the broader stock market. The high-end S & P 500 and the technology-heavy Nasdaq Composite index closed at 0.5% and 0.8% in New York, respectively, after trading narrowly in past sessions.

Manish Deshpande, Head of US Equity Strategy at Barclays, said: “I’m curious, but it’s not a macro event.”

GameStop shares fall while the SEC is investigating trading activity

https://www.ft.com/content/ea1da319-98b2-4440-8ea9-471c986502ff GameStop shares fall while the SEC is investigating trading activity

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