Video game retailer GameStop (GME) is being left out of the current meme stock rally.
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GME is known as the original meme stock and led the mania that gripped Wall Street in 2021 during the first meme rally. But this time around appears to be different as retail investors move on from the stock that gave the world catchphrases and buzz words such as “to the moon” and “stonks.”
So far, GameStop’s share price has risen only 0.30% in the last five trading days while a new crop of meme stocks have soared. Shares of Krispy Kreme (DNUT), GoPro (GPRO) and Kohl’s (KSS) have each gained more than 30% in the last week as retail investors execute coordinated short squeezes on those names as they did with GameStop four years ago.
Weak Short Interest
Analysts speculate that one of the reasons GME stock has been left on the sidelines during the current meme rally is that short interest in GameStop’s shares is currently low at less than 20% of the current count. After the epic 2021 short squeeze, most hedge funds and institutional investors abandoned their short positions in the video game retailer’s stock.
Some analysts also say that retail investors appear to have moved on not only from GameStop but also from other former meme stocks such as movie theater chain AMC Entertainment (AMC), whose share price is down 5% in the last week, and former smartphone maker BlackBerry (BB), whose stock is flat over the past five days.
The nature of meme stock rallies is that the investors involved hunt for new targets and focus on companies whose shares have a high short position, meaning professional traders and institutions are betting that the stock will go down.
Is GME Stock a Buy?
Currently, only one Wall Street analyst has a rating and price target on GameStop’s stock. So instead, we’ll look at the share’s year-to-date performance. As one can see in the chart below, GME stock has declined 26% this year.
