By
Godfrey Benjamin
April 17th, 2024
GameStop stocks have tumbled all their way down south after last week’s retail frenzy. The SEC has already started investigating the matter looking into the possible players involved in the GME price pump.
The brick-and-mortar video game company GameStop Corp (NYSE: GME) created a massive buzz on Wall Street as a group of Reddit-based retail investors skyrocketed the stock last week. These retail investors triggered massive buys against hedge fund shorts leading the latter to billions of dollars in losses. However, it seems that all the frenzy around Gamestop (GME) stock has fizzled out after the January expiry.
Also, as major hedge funds squared out their positions, the retail interest has also dropped. On Wednesday, the GME stock ended in green with marginal gains. Gamestop (GME) stock closed the trading session 2.7% up at $92.41 per share.
However, the stock has already eroded 80% of investors’ wealth in a week’s time. From the high of $469, the GME stock has dropped all the way to under $100. Even on Wednesday, the GameStop stock faced massive volatility as it swung wildly between losses and gains. The stock ultimately registered an upward momentum as the company said that it has hired a group of senior-level executives for its planned e-commerce business.
Matt Francis, who has previously worked at Amazon Web Services and QVC shall join as GameStop’s chief technology officer later this month. Besides, the company will also on-board two new vice-presidents with e-commerce experience. Kelli Durkin will be GameStop’s senior VP of customer care. She will be managing the company’s overall engagement activities as well as the customer service. Speaking to Bloomberg, Kelli Durkin will be GameStop’s senior VP of customer care said:
“The new leadership positions seem aligned with the shift to digital that RC Ventures is pushing. The reality is that business will look better this year regardless of any strategic changes because of the new video game console cycle”.
GameStop (GME) Stock Rally Attracts Scrutiny from the SEC
The US Securities and Exchange Commission (SEC) has started investigating the GameStop rally last week. The securities regulator is looking at social media messages to identify any possible cases of fraud. Along with GameStop, the SEC is also looking into other stocks like AMC Entertainment Holdings Inc (NYSE: AMC) and Nokia Oyj (NYSE: NOK) which were highly shorted by hedge funds.
The regulator is also digging deep into the trading data to see whether certain posts had coordinated efforts to take the stock price higher. Interestingly, as Seeking Alpha reports, the SEC will also investigate whether if some professionals were involved in manipulating the stock prices. For this, the SEC will check into how the brokerage firms have handled increased volumes and their decision to restrict trading during this spike.