What happened
Shares of GameStop (GME 1.50%) were bouncing higher Thursday in noontime trading, rising 3.5% following seven consecutive days of declines, especially following the announcement by Microsoft (MSFT 1.65%) that it was acquiring video game giant Activision Blizzard (ATVI).
While GameStop is in turnaround mode to better benefit from the transition to digital gaming and game downloads, the acquisition could seriously derail the effort if Microsoft keeps Activision's games exclusive to Game Pass, Microsoft's gaming portfolio.
Image source: Getty Images.
So what
The turnaround effort is still in its first stages, though the market has no idea what those plans will actually be as management has played it close to the vest on what the details will be.
While there's a certain sense to that strategy, it also leads to wild speculation, though part of it seems to be in the realm of non-fungible tokens, or NFTs. GameStop has been putting out help wanted ads, setting up a website, and calling for creators to participate on what is expected to be a new NFT gaming platform and marketplace.
Although there are still questions about whether NFTs will have any utility beyond certain niche markets, a number of investors think there will be enough traction that they're betting on it, too. Walmart (WMT -1.75%), for example, just filed for several patents related to Walmart-branded cryptocurrency, "virtual merchandise," and NFTs.
Volatility is a hallmark of meme stocks like GameStop, and on a day when the stock market bounces sharply higher, it’s undoubtedly going to lift a lot of boats along with it. The video game stock is simply riding the rising tide higher, and it wouldn’t be surprising to see it resume falling again tomorrow.
Now what
Despite some notable spikes over the past year, GameStop shares have largely trended lower, and shares of the meme stock are down by more than half over the last two months alone.
While Reddit stock traders continue to insist hedge funds, dark pools, and naked shorting are the biggest drivers pushing GameStop's stock lower, a lack of crucial information about where it is heading is also playing a big role.
