GameStop Stock News and Forecast: GME stock split news as stock soars 20%

• GameStop stock falls by over 7% on Wednesday.
• AMC also falls sharply, down nearly 13% by the close.
• GME falls back to the 200-day moving average.

Update: Gamestop (GME) stock is flying after hours on Thursday as the company announces it is to seek shareholder approval at the next Annual General Meeting (AGM) to increase the number of Class A shares from 300 million to 1 billion. This is for a share split. GameStop last did a 2 for 1 share split in 2007. Recent share split announcements from Google (GOOGL), Amazon (AMZN), and Tesla (TSLA) have been well received by shareholders. This looks like more of the same then as GME stock soars above $200 in after-hours trading to hit a high of $204. GME stock closed the regular session at $166.58. GameStop CEO Ryan Cohen must be happy. As recently as March 22 he bought 100,000 shares of GME at an average price of $101.76. At the time of writing GME stock is up 19% at $198 so a near doubling of his investment already.

GameStop stock (GME) fell on Wednesday as meme stocks began to pause for breath after a strong rally over the previous week. GameStop has rallied nearly 20% in the past week despite yesterday's falls. The performance for AMC is even stronger. Meme stocks came back into focus as risk attitudes recovered from the shock of the Ukraine conflict and the massive surge in energy prices. Interest rates were also marked higher, but the Fed appears confident in the strength of the US economy, and so risk assets caught a bounce. Initially, it was only high-quality large-cap stocks that benefitted, but last week saw this spread back into the more retail-orientated space as retail traders returned to some old favorites. 

GameStop Stock News

Ryan Cohen has decided to follow the lead of fellow meme stock CEO Adam Aron of AMC Entertainment in taking to Twitter. Ryan Cohen, the GME CEO, posed the question today: 

Naturally, the question generated much interest and response. Naturally, most of the responses were positive with neither short-sellers nor consultants finding much love from the Twittersphere. This is most likely referring to the dispute between Boston Consulting Group and GameStop. GameStop (GME) hired Boston Consulting in 2019, and Boston Consulting has now sued GameStop for about $30 million in fees, according to Bloomberg. 

GameStop also has a history with short-sellers. It was a short squeeze of epic proportions that kicked off the whole GME move last year. The stock had been heavily shorted using both stock and derivatives. Targetting short-sellers is an odd one since without them the epic squeeze could not have happened. Short-sellers are not liked by the retail community but are necessary to ensure prices remain accurate and reflect company performance and fundamentals. Without short-sellers, Ponzi schemes and pump and dumps are much easier and widespread. Lack of short-sellers generally leads to more fraud and less accountability. 

GameStop Stock Forecast

We saw the trend line worked again perfectly on this spike. On Wednesday, we called for recent gains in AMC and GME to stall and urged traders to take some profits. It has played out exactly as we wrote.

Historically, we can see that each spike in GME comes back down pretty quickly. It is likely to be the same this time. AMC also does the same, but often the spike is followed by a sharp fall as we say on Wednesday before a last dying push by bulls. But both AMC and GME have shown that the spikes do not last, so we expect the same again. Many readers will be GME or AMC devotees and do not wish to hear this, but trading is not about emotion or devotion to stocks. It is about making money. That is what traders' devotion should be too.

GME stock chart, daily