GameStop (NYSE:GME) stock is in full focus today following a rare insider buy. On March 29, Director Larry Cheng purchased 5,000 shares of GME stock at an average price of $22.79 through Cheng Capital LLC. Following the transaction, Cheng now owns a total of 44,088 shares. This marked the first GameStop open market insider purchase in over a year.
Excluding Cheng, the last GameStop open market insider buy was made on March 24, 2022 by Director Alain Attal. On that day, Attal purchased 1,500 shares at an average price of $129.91. Adjusted for the 4-for-1 stock split, the average purchase price was $32.47 per share. Three days before that, Cheng also reported purchasing 4,000 shares at average prices between $93.99 and $96.45.
Here’s what else investors should know about insider purchases of GME stock.
Director Larry Cheng Buys 5,000 Shares of GME Stock
Probably the most significant GameStop insider purchase in the past few years is attributed to Chairman Ryan Cohen. On March 22, 2022, Cohen purchased 100,000 shares at average prices ranging between $96.85 and $108.27. Cohen owns a total of 9.1 million shares through his investment vehicle, RC Ventures, according to the latest available data.
So, how do other insiders feel about GameStop? In the past year, insiders have purchased 301,423 shares and have sold 3,886 shares. That adds up to a net activity of 297,327 shares purchased, which is a positive sign. In the past three years, insiders have purchased $30.02 million of GME stock and have sold $20.79 million worth of shares, amounting to a net activity of $9.23 million worth of shares purchased.
Shares of GME are up by over 35% this past month, which is largely attributed to the retailer reporting its first quarterly profit in two years. Profit tallied in at $48.2 million, equivalent to an EPS of 16 cents. This was led by a reduction of selling, general, and administrative (SG&A) to $453.4 million, compared to $538.9 million a year ago. SG&A accounted for 20.4% of sales, compared with 23.9% of sales a year ago. Meanwhile, revenue came to $2.23 billion, down from $2.25 billion in the previous year.
Following earnings, S3 Partners’ Ihor Dusaniwsky noted that GME stock carried a short interest of 21.79% and was likely setting up for a short squeeze. Since then, shares of the company have accelerated higher by about 30%.
On the date of publication, Eddie Pan did not hold (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.