GameStop stock tumbles, but analyst still sees potential to press

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GameStop

the stock fell again shortly after the market opened on Tuesday. Although some short sellers have apparently covered their clumsy bets over the past few weeks, a short seller says he still sees a lot of pressure potential.

Shares fell 19% to $ 178.12 at about 10:30 p.m. Such levels are still many times higher than the stock’s one-year low of $ 2.57.

Ihor Dusaniwsky, managing director at short-selling analysis firm S3 Partners, said Barron’s On Monday, his company estimated that approximately 8.98 million GameStop shares (short name: GME) were recently sold short, approximately 16% of the shares available for trading.

Dusaniwsky said in the past month, his business has covered about 7.5 million shorts, meaning clumsy investors bought shares to cover their bets. The bulk came last week when 4.6 million shares were covered.

“The GME shorts are going short under pressure, and the stock remains one of the best stocks in our short press benchmark, which means the pressure is likely to continue if the stock price stays at these levels or higher,” Dusaniwsky added.

The company’s shares rose higher last week after an announcement that Ryan Cohen, co-founder of Chewy, was chairing a board committee aimed at transforming the dealer into a technology company. Cohen joined the board in January with two associates and began GameStop’s parabolic rise.

GameStop said it will report its fourth-quarter fiscal results on March 23. According to FactSet, analysts expect adjusted earnings of $ 1.35 per share, compared to $ 1.27 per share in the previous fiscal fourth quarter. Of course, analysts are much more clumsy on GameStop than the small investors who post on Reddit’s WallStreetBets forum. The highest price target that FactSet mentions is $ 33, while the average target is $ 14.64.

While short-term results could cool the GameStop rally, those excited about the stock are looking far into the future. If the company delivers optimal colors on its e-commerce efforts and the impact of the new game consoles, it can make a quarterly taste more palatable.

Write to Connor Smith by [email protected]