GameStop (NYSE:GME) stock the retailer providing games and entertainment products have been one of the most tradable meme stocks. The high and unusual stock price volatility makes its trading too risky and certainly not suitable for all investors. Shares of GameStop seem to have lost their previous erratic stock price movement as they have a 3-month return of 2.84% closing at $119.57 on May 2. Why is this important for GME stock now? Because GameStop has lost its meme status at least for now with the wild price swings. This could mean that you could focus on the underlying fundamentals and expect smoother volatility, which is not bad. On the contrary, it is all about risk management, which is trivial for successful stock investing.
Have you ever wondered who was behind the meme stock craze for quite some time? Not just for GameStop but for other stocks too? According to Sallie Krawcheck, the co-founder and CEO of a trading platform for women called Ellevest, you should blame men mostly for this irrational exuberance in stock trading that sent GME stock having a 52-week range of $77.58 – $344.66.
Why men are responsible for this phenomenon? Krawcheck said this is a “pretty bro-ey,” example as it has to do with gender disparity. Men and women think differently, and stock investing is no exception to this rule. Women may have to spend more time with daily tasks at home, compared to men and therefore men have more free time to download trading apps to go after high-risk investments.
I argue that the arguments made by Krawcheck are valid and seem very logical. It would be very interesting to have the opportunity to analyze in the future a study that will show us not only the gender of traders that participated in meme stock trading but also their age, education, and why not their income, and aspirations. Do men and mostly young people prefer trading high-risk stocks like GME stock? I would argue that this is so.
What could move GME stock now after the full-year 2021 results which showed an 18.09% sales growth and a wider net loss of -381.3 million compared to a net loss of -214.6 million in 2020?
The upcoming stock split in early June and the intention for the launch of NFT Marketplace by the end of second-quarter FY22 are two factors. Given the bad financial results for the FY 2021, a bearish thesis makes logic now.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
