GameStop (NYSE:GME), a retailer of video games, recently made some big adjustments. Notably, the company launched a non-fungible token (NFT) market and hired a new chief financial officer (CFO). In the meantime, it’s possible that the rapid return of the meme-stock trade drove GME shares too far, too quickly. So it makes sense to hold off on entering the trade until there has been a share price correction.
Do you believe the meme trade is over? Consider again since it appears that past short-squeeze targets are ready for another historic rally. One of them is GameStop, the poster child for the original-recipe meme that made Reddit famous.
Or was Reddit popularized by GameStop? In any case, it’s easy to get swept up in the excitement when a stock associated with a well-known meme suddenly soars.
However, it’s crucial to exercise patience, choose your buy price, and wait for it. Since GameStop is changing significantly, it is still too early to predict how these changes will turn out.
What is going on with the GME Stock?
Not quite as dramatic as what occurred the previous year. Even so, the GME stock doubled from about $20 on May 11 to almost $40 in August, which is a remarkable rally in and of itself.
However, the interest in meme stocks isn’t quite as strong as it was in 2021.
This could be as a result of some traders buying GameStop shares at the peak due to the excitement. The stock then likely lost a significant amount of value, leaving them vulnerable.
Therefore, today’s GME stock traders must maintain their composure and be realistic. Don’t anticipate a carbon copy of 2021. Those times are long gone, therefore you must trade based on what you are seeing right now, not on fond memories of possibilities from the previous year.
Wait Prior to engaging in the transaction with GameStop
GameStop is now going through a shift. One is that the business recently implemented a four-for-one share split. Second, Diana Saadeh-Jajeh, a new CFO, has recently joined GameStop.
In addition, the business is preparing to release its quarterly profits report in September. That particular incident might be enough to lower GME stock.
GameStop also launched an NFT marketplace. According to the business, this marketplace “enables participants to really own their digital assets, which are reflected and secured on the blockchain.” GameStop’s ability to turn its NFT marketplace into a potent income generator will only become apparent with time.
Ihor Dusaniwsky, managing director at S3 Partners, is currently adopting a cautious stance about the recent price increase of meme stocks. Dusaniwsky said, “There doesn’t seem to be much of a core rationale for the activity.
The sudden interest in GME shares and other meme stocks also seems to confound Monica DiCenso, managing director and head of the Global Investment Opportunities Group at JP Morgan Private Bank.
Fundamentally, she added, “I struggle to explain why some of these names should be up so much.”
What to Do Right Now
It’s obvious that not everyone supports the short-squeeze resurgence in 2022. It’s reasonable if you’re worried about GameStop’s current wave of adjustments.
Additionally, you might be concerned that the GME stock simply went too far, too quickly, and needs to retrace its steps. These are legitimate worries.
So it makes sense to be patient and wait for a decline in the share price of GameStop. You can then purchase a few shares and cross your fingers if you’re ready to join the meme-stock revolution.
David Moadel had no positions (direct or indirect) in any of the securities mentioned in this article as of the date of publishing. The InvestorPlace.com Publishing Guidelines apply to the author’s opinions as expressed in this post.
On behalf of the Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com, David Moadel has produced interesting content and occasionally stepped outside the bounds. He also maintains the well-known financial YouTube program Looking at the Markets and works for Portfolio Wealth Global as the principal analyst and market researcher.
The top 5 Fall getaways in the Northeast
This story has been updated with new information. Fall brings a welcome respite from summer’s heat and humidity as well...
Giant Slide reopened in the US for the first time since going viral
Thousands of people showed up to the Giant Slide in Detroit on the first weekend it reopened since going viral.
This hiker falls to his death at the Grand Canyon
A hiker walking in Grand Canyon National Park fell approximately 200 feet to his death on Friday afternoon, according to...
Ford fixed a problem with the Mustang that caused many crashes
Ford Mustang prototype mystery of 'The Bulge' has finally been solved.
You can buy a 90s Porsche-inspired boat, if you really want to
Yes, this is a yacht made to kind of look like a 993-generation 911 cabriolet.