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Yahoo Finance’s Ines Ferre joined Yahoo Finance to discuss the recent GameStop surge and why.
Video transcript
SEANA SMITH: But we want to come up with a huge engine today, and that’s GameStop. We had stocks that jumped – the stock was halted in the previous trade after a surge – over 140%. It’s a little back, but we want to get to Ines Ferre, who follows that for us. And Ines, there’s a lot of talk about the retail investor, how exactly that plays out in all of this. But wins like we saw in GameStop, especially earlier this morning, are definitely something you don’t see too often.
INES FERRE: Well, it’s amazing what we’ve seen with this stock. I mean, you had a high of $ 159 and a low of $ 61. As you mentioned, it has increased by over 140%. Then it briefly returned to red territory before returning to green. And this stock in July of last year was trading around $ 4 a share.
And what we’ve seen with this move is so much volatility over the last week, but also even before, because you had stocks hovering around $ 20 around January 12th. And it’s been just a wild ride over the past few weeks.
Now, Telsey’s advisers have removed their only outperformance rating from the stock, revaluing it twice today to underperform, solely on the basis of a valuation with a price target of $ 33. It’s actually a street top because Credit Suisse has a price target of 3.50 cents on this stock. So right now this stock has four takes and four sells.
We have spoken to some analysts. We spoke to Anthony Chukumba from Louis Capital. He said, look, if you want to play, go to the casinos. He’s talking, of course, about retail investors and what’s going on, about this shock that we’ve seen with Reddit users, Wall Street is betting with short sellers.
I mean, what you see on the stock is a huge crush on short sellers. And he said in over 20 years on Wall Street, he had never seen anything like it before. We also contacted –
ADAM SHAPIRO: Hey Ines?
INES FERRE: Yeah.
ADAM SHAPIRO: Let’s talk about this. The short interest on this stock was huge. And there has been pressure, however – it’s almost like we’re seeing the opposite. How serious is this, maybe someone is handling? And in the end, someone is still hurt.
INES FERRE: Yeah. I mean, it’s not necessarily something going on – there are people who predict, of course, that it was going to end badly. So S3, which is the data firm that looks at the shorts, spoke to us earlier this morning. They basically said they saw what’s called this massive short squeeze by older shorts. But then you have some of the new ones coming in hoping for that setback. This is why you saw this sharp increase of over 140% earlier this morning.
And also, they gave this great quote, basically saying, just like the War of Independence, that the first line of troops falls in a hail of musket fire but is replaced by the following troops in line. So you have shorts, but you have other shorts right behind them.
Now Brian Shannon, I know, spoke with Jared Blikre last Friday about those shorts and basically warned – he’s a veteran trader – and big warning, wait until the stock starts to fall before you do. throw, of course because of the shorts come in. Then they have to cover themselves. Then the stock goes up. But he says, wait for it because you want to wait for it to go down.
SEANA SMITH: Okay. Ines Ferre. Thank you so much for bringing us the latest news on GameStop. Again, shares are still quite significant, but well above their highs for the day.
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