Shares of GameStop (GME 14.04%) are soaring 16.2% higher this week, according to data provided by S&P Global Market Intelligence. The company is riding along on renewed interest in meme stocks and continuing momentum that really began two weeks ago.
The video game retailer's stock reversed a steady slide in its stock value beginning on Oct. 22. Other than a few minor dips along the way, it has basically been on an upward trajectory.
This past Monday, though, GameStop rose 3% after announcing its COO was leaving, and the company didn't look like it was going to fill the position as her duties were being assumed by other executives. It followed that up on Tuesday after Bed Bath & Beyond suddenly grabbed investor attention.
The moves GameStop made weren't based on the strategic turnaround it's planning but rather more on momentum from meme stock investors. It's possible traders began fixating on business fundamentals, but with sentiment rising behind a host of fellow meme stocks, that seems unlikely.
GameStop is trying to transition to an online and digital operation without giving up its physical retail footprint -- at least not all of it. Chairman Ryan Cohen is attempting to align the video game retailer with where the industry has been moving while still catering to the legacy players who want, need, or can only afford physical media for gameplay.
While there's hope he will succeed, the company still needs to prove it can make the transition.
GameStop has been a volatile issue for months, so these moves higher are nothing new, nor is giving back earned gains a surprise. Heading into midday trading on Friday, for example, GameStop shares are trading down more than 3%.
That's to be expected with the retailer, but the long-term outlook remains hopeful. It proved during the pandemic it could bring in loyal gamers and customers who still see the brand as the go-to destination for gaming hardware, software, and accessories. Having bought itself time to work out its turnaround plan by paying off all of its long-term debt, GameStop is in a much better financial position than it has been in for many years.