Yahoo Finance’s Ines Ferre joined Yahoo Finance to discuss the recent rise of GameStop and why.
Video transcription
SEANA SMITH: But today we want to get to one big car, and that’s GameStop. We made the shares jump – the stock was traded earlier after rising – get it – more than 140%. It just came back a little bit, but we want to get to Ines Ferre, who followed it for us. And Ines, a lot of it just talks about the small investor, how exactly it plays into all this stuff. But winnings like we saw in GameStop earlier this morning are definitely something you do not see too often.
INES FERRE: It’s amazing what we saw with this stock. I mean, you had a day high of $ 159 and a day of $ 61. As you mentioned, it has increased by more than 140%. After that, it returned to the red area shortly before going back to the green. And this stock in July last year traded about $ 4 a share.
And what we’ve seen with this move is so much volatility over the past week, but also before because you had shares at about $ 20 by about January 12th. And it’s been just a wild ride for the past few weeks.
Now Telsey Advisors has taken away their only better performance rating on the stock and today downgraded it to underperformance, purely based on valuation with a price target of $ 33. This is actually a street highlight, because Credit Suisse has a price target of $ 3.50 cents on this stock. At present, this stock owns four and sells four.
We did talk to some analysts. We spoke to Anthony Chukumba of Louis Capital. He said, look, if you want to gamble, go to the casinos. He talks, of course, about retail investors and what happened, the clash we saw with Reddit users, and Wall Street betting with short sellers.
I mean, what you see on the stock is a huge loss to short sellers. And he said in his more than 20 years on Wall Street, he had never seen anything like it. We also reached out to–
ADAM SHAPIRO: Hey, Ines?
INES FERRE: Yes.
ADAM SHAPIRO: Let’s talk about it. The short interest rate on this stock was huge. And there was pressure – it’s almost as if we’re seeing a reverse of this. How serious is it, maybe someone is manipulating? And at the end of it, someone always gets hurt.
INES FERRE: Yes. I mean, it’s not necessarily something that’s going on – there are people who predict it’s going to end badly. So S3, which is the data firm looking at shorts, spoke to us earlier this morning. They basically said that they had seen what is called the massive short print of older panties. But then you have some new ones coming in hopes of this downturn. That’s why you saw the big increase to more than 140% earlier this morning.
And also, they gave this wonderful quote, basically saying, just like the Revolutionary War, the first line of troops goes down in a rain of musket fire, but is replaced by the troops that are next in line. So you have shorts, but then you have shorts behind them.
Brian Shannon, I know, chatted with Jared Blikre last Friday about these shorts and basically warned – he’s a veteran trader – and basically warned, wait until the stock starts to break down before you go on it. go in. Then they have to cover. Then the stock goes higher. But he says, wait for it, because you want to wait until it breaks.
SEANA SMITH: Good. Ines Ferre. Thank you for giving us the latest GameStop information. Again, the stock is still pretty substantial, but it’s the best of the day.