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GameStop exploded as much as 93% higher on Wednesday as investors continued to make bullish bets on the retailer’s new board of directors.
The company agreed with activist investor RC Ventures on Monday to add three new members to its board, including Chewy founder Ryan Cohen.
The move pushed shares 12.7% higher on Monday and drove a modest gain the following session.
GameStop also revealed mixed holiday sales on Monday. Online sales tripled and same-store sales climbed over the nine-week period, net revenue sank 3.1% from the year-ago period.
Watch GameStop trade live here.
GameStop rocketed as much as 93% higher on Wednesday as the company’s board-member shakeup continued to pull in investors.
The gaming retailer on Monday announced an agreement with activist investor RC Ventures to add three new members to its board, including Chewy founder Ryan Cohen. The news lifted shares 12.7% on Monday and slightly higher still on Tuesday.
The Wednesday surge marks GameStop’s biggest single-day leap in history and places shares at their highest point since November 2015. More than 48 million shares had been traded as of 11:30 a.m. ET on Wednesday, more than six times the company’s 10-day average trading volume.
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GameStop also announced holiday sales on Monday. The retailer’s same-store sales for the nine-week holiday season rose 4.8% from the year-ago period, according to a press release. Online sales soared 309% and represented more than a third of holiday revenue.
Still, net sales sank 3.1% as store closures and limited supply of new Xbox and PlayStation consoles outweighed strong demand.
“Demand for the new generation of consoles remains very strong, and as a result, we anticipate the consumer’s excitement for the new console technology will benefit us going forward well through 2021,” CEO George Sherman said in a statement.
Though shareholders are all but certainly cheering the climb, one key indicator now suggests the stock is heavily overbought. The Relative Strength Index for GameStop shares — which tracks the stock’s momentum over the past 14 trading days, surged above 83 on Wednesday. Readings over 70 historically signal a stock is overvalued.
GameStop traded at $33.44 as of 11:55 a.m. ET Wednesday, up 88% year-to-date.
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Source:: Business Insider