GameStop (GME) stock rallied on Monday as investors took interest in the video game retailer following comments from its CEO. GameStop CEO Ryan Cohen told CNBC that he wants to transform the company via what he called a “very, very, very big” acquisition of a consumer company. However, he didn’t say which company this deal was with, suggesting negotiations are still ongoing.
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What investors do know about Cohen’s plan is the size of it. The GameStop CEO claims that this purchase would take the struggling retailer from a $10.5 billion market capitalization to a market capitalization of more than $100 billion. He also said the deal would be genius if it works, but would be totally foolish if it didn’t.
Cohen’s interest in transforming GameStop extends beyond just an acquisition. The CEO wants to pull the company out of meme stock status, returning it to trading on merit rather than investor excitement. GameStop is one of the original meme stocks that rose during the COVID-19 pandemic and has continued to be a favorite among meme traders today.
GameStop Stock Movement Today
GameStop stock was up 6.45% on Monday, extending a 24.83% rally year-to-date. However, the shares were still down 7.76% over the past 12 months.
With today’s news came strong trading of GME stock, as some 6.3 million shares changed hands, compared to a three-month daily average trading volume of about 7.24 million units.
Is GameStop Stock a Buy, Sell, or Hold?
Turning to Wall Street, analyst coverage of GameStop is lacking. Fortunately, TipRanks’ AI analyst Spark has it covered. Spark rates GME stock a Neutral (62) with a $25 price target. It cites “improving profitability, cash flow generation, and a healthier balance sheet” as reasons for this stance.
