GameStop News: GME Stock Gets Goosed 30% by Chewy Co-Founder Stake

GameStop (NYSE:GME) is in the news Monday after revealing that Chewy (NYSE:CHWY) co-founder Ryan Cohen has taken out a significant stake in the company.

GameStop (GME) Store at a street corner with people walking past it
Source: rblfmr/Shutterstock.com

A filing with the U.S. Securities and Exchange Commission (SEC) on Friday revealed that Cohen now holds a 9% stake in the company. That due to his RC Ventures acquiring 5.8 million shares of GME stock.

Ryan Cohen spent roughly $33.97 million to acquire his 9% stake in GME stock. According to the filing, the reason for the purchase is that the Chewy co-founder believes the shares are undervalued and represented an investment opportunity.

So why exactly would Cohen take an interest in GME stock now? It’s possible that he sees further upside to the stock. GME is down 14.6% year-to-date as of Friday’s close but has been on the rise these last few months as markets recover from the novel coronavirus pandemic.

Another reason that Cohen could be looking to pick up GME stock now has to do with Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT). Both companies are preparing for the release of their next generation of video game consoles later this year.

When the new game consoles release, it’s likely that GameStop will see un uptick in business from gamers looking to buy the newest consoles, as well as games and accessories for them. Adding to that is the approaching holiday season that should also boost its business higher alongside the launch of the next-gen consoles.

GME stock was up 30.1% as of Monday afternoon.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2020/08/gamestop-news-sends-gme-stock-soaring/.

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