Down more than 25% since late November, here’s what could happen next for the original meme stock.
As seen in recent days, GameStop stock has been affected by the stock market’s latest round of volatility. Due to news of the Covid-19 Omicron variant, plus talk from the Federal Reserve about an end to its “easy money” policies, stocks across-the-board have declined since late November.
During the same timeframe, shares in the video game retailer and “meme stock bluechip” have fallen by some 25%. But now, as Omicron worries may be fading, and volatility could soon clear up, what’s the next move for GameStop?
Put simply, it’s debatable. Bulls can point to certain factors to support their views, as can bears. With this, let’s dive in, and explore what could push shares higher (or lower) from here.
How GME Stock Could Rebound After The Omicron Selloff
With its rapid drop during the week ending Dec 3, it may seem as if this stock is starting to lose its “unsinkable” reputation earned after holding onto most of its gains from its incredible run earlier this year.
But while many in the so-called “Ape army” may have trimmed/exited positions last week, there could be something that stops this latest selloff from being the beginning of the end for GME stock.
That would be the company’s upcoming earnings release on Dec 8. If coupled with a recovery from the Omicron selloff, shares could experience a big rebound in price.
This may be especially true if, along with better-than-expected earnings, the company releases more details about its e-commerce plans, plus other initiatives, such as its rumored move into NFTs (non-fungible tokens). News like it could help convince “Apes” still long the stock to maintain their positions, and convince others who got out after last week’s volatility to dive back into it.
Why The GameStop Price Collapse May Continue
While it may be premature to say that many in the “Ape” community are ready to throw in the towel on GME stock, there is some evidence pointing in this direction.
Chatter on Reddit’s various stock-trading subreddits is dropping once again. Although according to ApeWisdom.io mentions are up 47% in the last 24 hours, the current level of discussion about it on the platform is down considerably from the elevated levels seen last month.
The main rationale behind holding this stock (to short-squeeze it) has fallen off as well. According to Fintel.io,short interest has dropped to just under 11%.
GME’s waning appeal as a squeeze play may explain some of the frustration expressed by Reddit traders, after Fidelity Investments incorrectly stated the number of shares available to short through its platform.
Bottom Line
Bouncing between $160 and $170 per share today, it’s not definitive as to where GME stock is headed from here.
But Wednesday’s earnings report and management updates may prove crucial to reinstill confidence among “Apes”.