GameStop Corp.'s stock jumped on Monday amid reports that the video game retailer and sometime meme-stock darling is planning to revamp its membership rewards program. The company's shares surged 8% in early trading, reaching $25.02 per share before settling at $23.27 by the end of the day. So far this year, shares of the video game retailer have been trading based on business news, rather than on meme-stock speculation.
GameStop's plans to revamp its membership rewards program come as the company seeks to capitalize on renewed interest in gaming during the COVID-19 pandemic. The company has struggled in recent years as gamers have shifted from physical media to digital downloads, but it has seen a resurgence in interest thanks to the pandemic.
The company's new membership rewards program is expected to offer discounts on games and other products, as well as exclusive content and early access to new releases. GameStop has also been investing heavily in its e-commerce capabilities in recent months, in an effort to better compete with digital retailers like Amazon.
While GameStop's stock has been trading based on business news rather than meme-stock speculation this year, the company remains a favorite among retail investors and meme-stock traders. The stock has been one of the most heavily traded on the market in recent months, with daily trading volumes often exceeding those of much larger companies.
Despite its popularity among retail investors and meme-stock traders, GameStop's stock has been heavily shorted by institutional investors, who have bet that the company's stock will fall. However, a whale with a lot of money to spend has taken a noticeably bearish stance on GameStop, looking at options history for the company.
GameStop's stock has also outperformed its sector so far this year, along with MercadoLibre. Both stocks have seen gains of more than 20%, while the broader sector has gained just 4.6%. GameStop's recent surge has been driven in part by reports that Bill Pulte is buying shares in the company.
Despite the recent surge in GameStop's stock, not all institutional investors are bullish on the company. Ray Dalio's Bridgewater sold its GameStop and AMC stakes in the first quarter, while Jim Simons' RenTech bet on Tesla and Bed Bath & Beyond.
Overall, GameStop's plans to revamp its membership rewards program and invest in its e-commerce capabilities come as the company seeks to stay relevant in a rapidly changing industry. While the company's stock remains popular among retail investors and meme-stock traders, it is also facing significant headwinds from institutional investors who are betting against its success. Nonetheless, GameStop's recent surge suggests that the company's fortunes may be turning around, at least for the time being.
Ticker: GME, MELI
