GameStop SEC Investigation Sparks Stock Turbulence – What’s Next?

Boston, MA – The return of GameStop as a meme stock is drawing attention from federal regulators. GameStop shares have dipped over 2.5% as the Securities and Exchange Commission (SEC) begins to scrutinize options trading related to the company.

The SEC is particularly focusing on Keith Gill, also known as Roaring Kitty on Reddit’s r/wallstreetbets page, who purchased a significant number of call options on GameStop before sparking a surge in stock prices through social media.

Amidst this, investor Andrew Left, known for short selling with Citron Research, continued to bet against GameStop despite facing losses in May. Left criticized Gill’s actions, suggesting they were more manipulative than based on solid investment strategies.

Inside GameStop stores, a noticeable shift is occurring as collectibles and Funko Pop figurines replace used game racks. The company has also ventured into new territories, such as buying and selling rare Pokemon cards with Professional Sports Authority grading. Additionally, GameStop has introduced a cryptocurrency, the GME coin, which briefly reached $0.02 before dropping back to sub-penny levels.

From a Wall Street perspective, Michael Pachter from Wedbush Securities is the sole analyst covering GameStop and has assigned a Sell rating to the stock. Despite a 13.47% rally in stock price over the past year, Pachter has not provided a price target for GameStop shares. The future trajectory of GameStop remains uncertain as regulatory scrutiny and market fluctuations continue to impact the company’s valuation.