- On Thursday, GameStop finally acknowledged the ongoing short squeeze driving its stock price up.
- GameStop leadership said the stock is “extremely volatile” and out of their control in an SEC filing.
- The squeeze that began in mid-January has extended into late March, with no signs of stopping.
- Visit the Business section of Insider for more stories.
GameStop said Tuesday that its stock is -and continues to be – “extremely volatile.”
Moreover, that volatility is “due to numerous circumstances beyond our control.”
The statement in a regulatory filing is the first such statement from GameStop leadership on its ongoing stock price fiasco that’s seen its shares rise as much as 1600% in a matter of weeks.
Under the “risk factors” section of the annual report, the company’s stock volatility is listed as the primary risk factor related to the company’s stock. It specifically cites “short squeezes” as a primary reason for that volatility.
“The market price of our Class A Common Stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control,” GameStop said in the filing.
GameStop’s stock value has been explosively unpredictable since mid-January.
Between January 15 and January 27, the price leapt from around $US35 ($46) to just shy of $US350 ($459). It’s seen similarly huge dropoffs, but months later it’s still in the $US180 ($236) range.
The reason, of course, is the much discussed “short squeeze” from a large group of individual investors driving up the company’s stock price in an effort to defeat short sellers betting against the stock. It’s been a major topic of discussion for the past several months for loads of people in media and on Wall Street – except for GameStop leadership.
The company has more or less stayed mum for weeks, and even declined to discuss it on its quarterly earnings call this past week. Instead company leadership focused on the company’s ongoing “transformation” led by Chewy cofounder and former CEO Ryan Cohen.
Since Cohen joined the company’s board in January, taking charge of a “strategic” committee soon after, the company made a string of high-profile hires from the likes of Amazon and Chewy.
It is unclear what Cohen’s specific plans are the future of the company, but he broadly outlined plans in an open letter to the company’s board in late 2020.
GameStop, “needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences,” Cohen wrote in the letter, “not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”
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