Two years ago, the infamous ‘GameStock’ short-squeeze saga orchestrated by the Reddit (NYSE: RDDT) community r/wallstreetbets had a lasting impact on the stock market. It shed light on the significant influence wielded by social media and the collective power of everyday traders.
Since then, GameStop’s (NYSE: GME) stock has experienced a significant decline from its peak. However, it recently bounced back, gaining 15% in a single day. This resurgence has left investors questioning whether GME stock is on the path to recovery.
What caused GME stock’s 15% surge?
GameStop is set to release its Q4 and full-year fiscal 2024 results today, March 26, after the market closes. Analysts are optimistic, expecting an EPS of $0.30, an 84% increase from the previous year, despite a projected 8% decline in revenues to $2.05 billion.
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This potential profit would mark GameStop’s first annual net profit since 2018, showcasing the impact of CEO Ryan Cohen’s efforts to streamline operations and reduce costs. Of particular interest are the Selling, General, and Administrative (SG&A) expenses, which have been significantly trimmed under Cohen’s leadership.
The market responded positively in anticipation of the earnings, with GameStop shares surging 15% during the March 25 trading session, pushing them back above $15. However, the stock still maintains a -9% year-to-date decrease despite this recent uptick.
It’s uncertain whether this recent activity was merely a brief hype leading up to earnings or if strong financial results could spark another rally. We’ll have to wait and see.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
