What happened
GameStop (GME 6.16%) investors are partying like it's 2021. After rocketing up more than 30% yesterday, GameStop shares are marching higher again today. The stock popped 17% early Wednesday and was still up 12.3% at 11:22 a.m. ET.
So what
Sometimes these moves can be written off as just meme stock moves being driven by retail investors pushing each other to buy the stock on social media. That appears to be along the lines of what happened yesterday, but that just so happened to also presage some news that was music to the retail investing crowd's ears. After the bell yesterday, GameStop filed a statement showing widely followed chairman Ryan Cohen just bought 100,000 shares of the video game retailer.
Image source: Getty Images.
Now what
Yesterday's market action came as chatter increased on Reddit's WallStreetBets forum about the valuation of the stock and the still-high short interest. At the end of February, almost 19% of the float was held short, according to CBS MarketWatch.
But at the same time, it appears chairman Ryan Cohen was also purchasing shares. The 100,000-share purchase reported yesterday brought his ownership to about 12% of the company. Cohen bought the shares at prices ranging from $96.81 to $108.82 per share, according to the filing.
Cohen has said he would help transition the company from a brick-and-mortar business to more of an e-commerce model. But GameStop has been short on details related to the progress of the transition. After the company reported earnings last week, management said the company still expects to launch a non-fungible token (NFT) marketplace by the end of the second quarter. But management didn't take questions from investors or analysts to offer any follow-up.
The retail investors seem to be satisfied with seeing Cohen add to his stake, though, which is helping to drive shares higher again today.
