Robinhood Markets Snubbed by Investors on Nasdaq Debut

Commission-free trading app Robinhood is officially a publicly traded company, but investors did not roll out the welcome mat for the stock. Shares of Robinhood, which trade under the symbol “HOOD,” opened at USD 38 per share on the Nasdaq before falling to around USD 33. The new stock managed to recover some of those losses and is down 5% at the last check, which is better than the close to 10% declines it suffered earlier in the session.

Source: TradingView

Isn’t It Ironic?

There has been a great deal of hype surrounding the Robinhood app, for several reasons, chief among which was its decision to earmark shares for its users. Robinhood pledged more than one-third of its float for customers of the trading app, which is on the generous side. A typical IPO will reserve less than 10% for retail investors as hedge funds and other big investors tend to get first dibs.

Individual investors have seemingly not returned the favor to Robinhood, leaving the mobile trading app hanging on its stock market debut. It could have gone either way. Robinhood was hoping to mend the fences between itself and jilted retail investors who were left holding the bag after the broker placed trading restrictions on popular meme stocks, including GameStop and AMC Entertainment.

The massive buying in GME And AMC by the Reddit WallStreetBets crowd in early 2021 pressured short-sellers, mainly hedge funds, and Robinhood caved to the pressure. The broker has since lifted those trading restrictions. Apparently, all is not well that ends well, however, if Robinhood’s stock price on day one is any indication. Social media members couldn’t resist the irony of the situation.

Celebrity Backers

Robinhood is kicking off its future as a public company with a market cap of USD 34 billion. A couple of astute backers who timed it right are Nas and Snoop Dogg, who invested in the trading app in 2014 when the company had a value of USD 62 million attached.

NBA champion Kevin Durant and his manager Rich Kleiman are probably not complaining either. They placed a bet four years ago through Thirty Five Ventures, the VC firm Drant and Kleiman co-founded.

Their return on Robinhood is reportedly in the ballpark of 2,500%.

GameStop Does Some Rebranding, Gains Twitter Nod

GameStop apparently has no use for the popular phrase, ‘if it ain’t broke, don’t fix it.’ The gaming retailer is making changes, including the rebranding of its EB Games segment in Canada. The company’s EB Games locations throughout Canada as well as its e-commerce store will be operating under the GameStop name by the end of the year. GameStop’s Canadian rebranding comes in response to feedback from its customers and investors.

The move is being met with mixed reactions on social media. Some users are questioning the use of the company’s resources to make the change, while others are saying it took them long enough. One thing that people seem to agree on is that if GameStop wants to remain relevant, it is going to have to transform itself into a digital-focused company. That is precisely what GameStop is trying to do.

Digital Push

GameStop is getting a boost from social media giant Twitter. According to reports, Twitter is including GameStop in a group of companies that will be permitted to make a product push on their account page as Jack Dorsey’s company similarly looks to broaden its reach.

GameStop is one of 12 companies that will be able to spotlight nearly half a dozen products on its Twitter profile page. Reminiscent of the Tinder dating app, there will be a “swiping” capability as well as the opportunity to be brought to GameStop’s e-commerce site to complete a sale.

This program, which is dubbed Shop Module, could go a long way for GameStop’s desire to be part of the digital pack, which is where all of the gaming companies reside. For its part, Twitter won’t become an e-commerce site in the true sense of the word, as it won’t actually be processing any of the transactions or taking a piece of the sales pie.

Cruel Summer

Twitter’s stock is higher on the day, but GameStop is trading in the doldrums. GameStop’s stock is down more than 5% today and has fallen below the USD 170 level. In early June, GameStop shares were trading at more than USD 300 but it has been a cruel summer for meme-stock investors.

Meanwhile, GameStop has muscled its way into the S&P 400 midcap index, effective early August. GameStop’s market cap currently hovers at USD 12.6 billion.

GameStop to Rebrand EB Games in Canada by Year-End

Grapevine, Texas-based GameStop had acquired EB Games’ owner Electronic Boutique Holdings Corp in 2005 for more than $1 billion.

EB has about 4,000 stores across Canada, with operations in Australia, New Zealand, and countries across Europe, according to its LinkedIn page https://bit.ly/3iOKO7a.

“This decision follows our receipt of feedback from our valued customers and stockholders,” GameStop said.

The company has been looking to shift its focus from brick-and-mortar sales and accelerate its e-commerce push. Its largest shareholder, Ryan Cohen, joined its board in January and became chairman last month with a plan to revive stores and boost online sales.

Separately, S&P Dow Jones Indices said on Tuesday that GameStop — one of the hottest and most visible “meme stocks” — will join the S&P MidCap 400 index next week

(Reporting by Eva Mathews in Bengaluru; editing by Uttaresh.V)

Stock Futures Tread Lightly Ahead of Monday’s Trading

Stocks ended last week on a sour note after the Dow Jones Industrial Average tumbled close to 300 points to slip further below the 35,000 threshold. The S&P 500 and tech-heavy Nasdaq also finished Friday in the red. For the week, all three major indices lost ground after advancing for three straight weeks.

Retail sales climbed a higher than expected 0.6% last month vs. May, but investors chose to see the glass half empty and turned their attention toward inflation once again. Consumers are beginning to feel the effects of rising prices on real estate, cars and durable goods, according to the University of Michigan’s consumer sentiment index, which fell to 80.8 in the first half of July from June’s 85.5.

Stock index futures were not showing any clear direction on Sunday evening. Dow Jones Industrial Average futures were unchanged, while S&P 500 and Nasdaq futures were slightly positive. Economists cited by The Wall Street Journal believe economic growth saw its best days in the second quarter and will begin to ease. Nonetheless, the economy will keep expanding in 2022, economists say.

Stocks to Watch

Meme stocks were a mixed bag on Friday. AMC Entertainment shed nearly 3% while GameStop hit a stride and gained slightly more than 1% after five consecutive days of declines. GameStop has a new competitor after streaming giant Netflix made a key hire to muscle its way into the video game fray.

In the oil patch, OPEC+ has decided to bolster production for the next couple of years amid strengthening demand in a post-COVID-19 economy. The barrels of oil will be added on an incremental basis until the end of next year. Oil prices including WTI and Brent crude have retreated approximately 5% as the likelihood of an agreement between OPEC and its allies increased.

Look Ahead

Existing home sales for June come out on Thursday at 10 a.m. ET. Wells Fargo economists predict that they climbed higher to 6.06 million units vs. 5.8 million units for May.

As the earnings parade rolls on, technology companies are the next in line. IBM is in the pipeline for Monday. Wall Street has high expectations given that Big Blue is up against numbers from last year’s pandemic-fueled economic slowdown.

In addition, investors will be watching to see the results out of the transportation sector, which tends to serve as a gauge of the economy. J.B. Hunt Transport Services will report earnings after the market closes.

Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks finished the day mixed as comments out of Federal Reserve Chairman Jerome Powell resonated with investors. The Dow Jones Industrial Average and the S&P 500 finishing with gains while the Nasdaq extended its recent declines. Powell told lawmakers he expects inflation will calm down while monetary policy should remain intact.

Bank of America flexed its muscle with a more than doubling of profits in the second quarter. Investors, however, focused on falling revenue and punished the stock, sending shares lower by 2.5%.

Stock index futures are treading lightly on Wednesday evening as investors brace for another round of jobs data coupled with the continuation of the Q2 earnings parade.

Stocks to Watch

Netflix is trading 2% higher in the after-hours market. The company has snagged a seasoned video game executive for its gaming venture. Netflix hired Facebook’s VP of augmented reality, Mike Verdu, as it looks to take share in the gaming space. Verdu also held stints at Electronic Arts and Zynga.

Meme stocks were under pressure today, with shares of AMC Entertainment tumbling 15% in the regular session. The declines continued in extended-hours trading. The selling pressure also spilled over into GameStop, which could be feeling the heat from Netflix’s gaming push.

There could be some M&A news coming up. Cybersafety company NortonLifeLock announced it could be combining with British cybersecurity play Avast. Shares of NortonLifeLock came under pressure on the development and are down more than 2% in extended-hours trading.

Look Ahead

Investors will be looking to see if stocks return to their record levels on Thursday or continue to trade cautiously amid an uncertain inflationary outlook. On the earnings front, banks will continue to report their results including Morgan Stanley.

Economic data could also influence the direction of stocks. Industrial production for June is expected at 9:15 a.m. ET. Wells Fargo economists described manufacturing demand as “robust.” While input costs are high and supply chain constraints are an issue, the economists are predicting a 0.8% increase for June.

In addition, unemployment claims come out on Thursday. Consensus estimates call for a decline in the number of claims to levels not seen since before the pandemic reared its head.

GameStop Investors Speculate on Meme Stock’s NFT Launch

Meme-stock and cryptocurrency investors alike are speculating on Twitter about whether today is the day that the company will introduce a non-fungible token, or NFT. Non-fungible tokens are digital assets that integrate some object, such as a piece of artwork, video, or anything that the creator can imagine, including a game apparently.

Based on the source code of a GameStop blockchain contract, July 14 had emerged as the speculative launch date for the NFT. That theory is losing its luster, however, as the clock continues to tick. That doesn’t mean that a GameStop NFT isn’t in the works.

A GameStop NFT website has already been launched, fueling the speculation that the unveiling of the gaming token is not too far behind. Plus the company recently brought on Matthew Finestone as head of blockchain.

Investors are anxiously awaiting the details of what the digital token will have to offer and have begun to unpack the coding tied to a cryptocurrency wallet address for clues. Solidity developer and Twitter account @0xfoobar is reportedly behind the GameStop blockchain contract and has seemingly been busy building the NFT. The GameStop team has been keeping the details of a gaming NFT close to the vest, but the launch could be tied to the Ethereum network upgrade.

Source: Twitter

Gaming and NFTs

Gaming is a natural fit for NFTs, given that gamers are already accustomed to buying in-game virtual assets like skins, currency and more to up the ante. The most popular NFTs have been known to sell for tens of millions of dollars. A GameStop NFT could generate some excitement both in the blockchain industry and among traditional gamers, which has the potential to spill over into the stock to give it a much-needed jolt.

GameStop, the meme stock that started it all, has seen its value decline by close to 20% in the month of July so far. Year-to-date, shares of GameStop have gained more than 800%.  Short interest in the stock hovers at 13.3% and has increased more than 9% in recent days, as per S3 Partners data cited by CNBC.

Meme Stock Malaise 

July is almost halfway over and meme stock investors are licking their wounds after a bout of declines. Based on the activity on Reddit and other social media platforms, retail investors are holding, for the most part, and waiting for their fortunes to turn around. They are also getting tired of seeing red day after day as their strategy to squeeze sophisticated traders hits a bump in the road.

The major meme stocks are still up for the year and have outperformed the broader markets, but they have tumbled in recent weeks. Some are blaming it on the rise of inflation rather than anything company-specific in their favorite stocks. Either way, the bears appear to be in control for the time being as trading volumes weaken and the summer doldrums kick in. It is nothing a GameStop NFT could potentially fix, but when that will become a reality is the question.

 

GameStop Stuck at Current Level as Investors Hunt Bottom

GameStop shares have put investors through the wringer of late, with the stock having shaved off more than one-third of its value since early June. Trading volume is lighter than usual, suggesting that the downturn could have something to do with the summer doldrums.

Nonetheless, retail investors are itching for any sign that their favorite meme stock may have finally hit a bottom and is ready for its next upward move.

One Reddit member has posted a technical analysis thread on the forum in which they explain how the technical stars could be aligning for a turnaround in GME. The thread has received more than 500 comments. Investors are responding to the fact that GameStop has “formed a candle combo off of support lines” that is reminiscent of previous set-ups that preceded rallies, according to the thread.

Wall Street Weighs In

The last place that retail investors are looking to for direction is analyst firms. Nonetheless, Wall Street continues to weigh in on the meme stock craze. Most recently, Ascendiant Capital Markets analyst Edward Woo more than doubled his price target on GameStop’s stock.

The analyst’s 12-month target went from USD 10 to USD 25, which for all intents and purposes seems bullish. Considering that GameStop shares are trading at USD 190, however, the upward revision did little to lift the stock.

Super Mario Stays Relevant

The gaming industry has been thrust in the spotlight after an unopened copy of a Super Mario 64 game cartridge was sold at an auction for more than USD 1.5 million, setting a new record. While Nintendo is behind Super Mario, the sale was a boon for all of gaming, including GameStop, which is moving away from nostalgia and into the digital age.

The Super Mario 64 cartridge dates back to 1996. That was four years before GameStop as the world knows the brand today was born. While the gaming retailer’s history began in the 1980s, it went through an evolution of brands before becoming today’s GameStop. Incidentally, the company is on a new journey to transition from a brick-and-mortar to a digital retailer.

Despite the excitement around the game, Super Mario did little to lift the mood of gaming investors.

Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks rebounded as investors breathed a sigh of relief now that the Fed minutes are out, sending all three major indices higher. The S&P 500 reached its latest all-time high to hover above 4,358. The Dow Jones Industrial Average tacked on another 100 points, while the tech-laden Nasdaq closed modestly higher.

Policymakers in their FOMC minutes from the June meeting expressed a need for “patience” before making any changes to the Fed’s asset-buying program. This soothed investors’ fears about any sudden change in monetary policy.

Technology stocks were out front once again, including the likes of Apple and Amazon. For its part, Apple reached a new record high, closing at just above USD 144. In fact, while the S&P 500 has been on a tear, AAPL and AMZN have outperformed the broader index in the short term. Both tech stocks have advanced by double-digit percentages since early June while the S&P has increased just over 3% in the same period. Apple’s market cap is now USD 2.4 trillion.

The oil patch saw more volatility, with the crude oil price falling 1.5%, extending Tuesday’s declines amid stalled production talks involving OPEC+ countries.

Stocks to Watch

Meme stocks continued their downward spiral, with AMC Entertainment feeling the brunt of the selling. The movie chain stock shed almost 10% on the day and is continuing under pressure in after-hours trading. It was not alone, as shares of GameStop extended recent declines and fell by 5%. AMC and GameStop have closed in the red for the past four trading sessions in their worst such stretch since May.

While meme stocks bucked the overall bullish trend, several stocks are continuing the market’s upward momentum in extended-hours trading.

  • WD-40 Company is up by nearly 10% in after-hours trading after its third-quarter earnings results surpassed Wall Street’s estimates. The company also raised its revenue outlook for the full fiscal year amid robust demand for its cleaning products.
  •  GAN Limited is up an eye-popping 17% in extended hours on the heels of its preliminary Q2 results. The gambling company’s revenue was “higher than expected,” as a result of which it bolstered its full-year sales outlook.

Look Ahead

Investors will be looking to see if anything could stop this runaway train that is the markets.

AMC Investors Dig in Their Heels as Stock Tumbles

Meme stock AMC Entertainment may be trading below the USD 50 threshold, but retail investors are keeping their chins up. They vow to hold on for what could be the pinnacle of all short squeezes in which hedge funds are forced to cover their bearish positions by buying shares and potentially sending the stock price soaring.

One widely followed analyst whose Twitter account is BAM Investor predicts that AMC will reach new all-time highs in August. His followers are divided on whether or not to bet on it, with some preferring that he not reveal dates so as not to tip their hand to short-sellers. In the interim, AMC shares remain under pressure and have shed 8% today.

The downtrend in meme stocks including AMC and GameStop started in June. And while both stocks are still up handily for the year, they have been leaving once starry-eyed investors feeling frustrated so far this summer. Both stocks are facing their fourth consecutive day of declines, a trend that hasn’t reared its head since early May.

Short Interest on the Rise

While the AMC stock price has been headed lower, short interest has seemingly been on the rise. Roensch Capital, a securities analysis firm, illustrated in a live update that short interest in AMC has climbed 5% higher today, and rising.

Meanwhile, Roensch also revealed that options traders are looking ahead to next year, as evidenced by more than 3K January 2022 USD 145 call contracts traded. Some of its followers are hoping to see the AMC price “pop sooner than that.”

Blame Game

Retail investors maintain that they are holding and not selling under the pressure. They are also complaining, however, that the stock “is being manipulated down by hedge funds.” Others are suggesting that AMC CEO Adam Aron’s backpedaling on the sale of 25 million shares could be the culprit.

On July 6, The Joe Rogan Experience podcast brought some attention to meme stocks including AMC when co-host Adam Curry addressed stock price manipulation on the show. He described how retail investors called hedge funds out for their shorted shares, particularly with GameStop and AMC, describing how sophisticated traders are now “eating themselves” and the “game is over.”

Today’s Market Wrap Up and a Glimpse Into Wednesday

Stocks interrupted their winning streak as investors took a breather to start the holiday-shortened week on a sour note. The S&P 500 finished slightly lower, while the Dow Jones Industrial Average shed more than 200 points and the tech-heavy Nasdaq managed to eke out some gains.

The S&P ended its seven-day record-close stretch, while the Dow similarly failed to build on its all-time high. There was no single negative event to drag stocks lower, though the ISM’s purchasing managers’ index for June came in slightly weaker than expected.

And even though last week’s employment report showed robust jobs growth, the unemployment rate is still hovering at an alarmingly high 5.9%. Trading was relatively light, suggesting that the summer doldrums might stick around for a while.

Tech was the bright spot, buoyed by Amazon, which bucked the downward trend and raced ahead by nearly 5%. The stock benefited from a decision by the government to shutter a multi-billion-dollar JEDI cloud contract it had with Microsoft, potentially paving the way for Amazon to muscle its way in.

 

Stocks to Watch

Wall Street Bets, the Reddit account that started the meme stock craze, has taken its subreddit away from public view. The popular account has switched the forum to private mode, essentially blocking anybody who has not been approved from viewing or participating in the discussion.

As fate would have it, a couple of meme stocks were punished on Tuesday, chief among which was Clover Health, which shaved nearly 15% off its value. AMC Entertainment shed almost 4%, failing to maintain the gains it achieved after revealing it would nix plans to pursue a sale of 25 million shares.

In true Amazon fashion, GameStop has leased space in Reno, Nev. for a fulfillment center to house its video games and electronic components. The facility, which will be operational next year, will be used to accelerate shipments to West Coast customers. GameStop recently tapped Amazon alum, Matt Furlong, as its CEO, and the company’s digital strategy is beginning to take shape.

Look Ahead

The FOMC meeting minutes will be released on Wednesday afternoon, giving investors the opportunity to see exactly what policymakers are thinking. The Fed has already tipped its hand to upcoming more hawkish monetary policy, and investors are hunting details on when as well as any indication of inflation trends.

AMC Rallies After Company Withdrew Stock Boosting Proposal

The shares of AMC Entertainment rallied today following the company’s announcement that it is withdrawing its plans to issue up to 25 million more shares. The market has responded positively to the news, with AMC one of the best-performing stocks in recent months.

AMC Won’t Issue New Shares

AMC Entertainment announced earlier today that it would no longer be going through with its earlier proposal. The company had previously proposed that it would issue 25 million more shares and intended to submit the proposal in its upcoming annual meeting of stockholders.

However, AMC’s CEO Adam Aron clarified earlier today that the movie theater chain would no longer be submitting the proposal. He said he wanted the shareholders to authorize 25 million more AMC shares. However, since the proposal has been met with a strong rejection, AMC would no longer proceed with it.

AMC stock chart. Source: FXEMPIRE

The news sent AMC’s stock price soaring by over 5% at Tuesday’s pre-trading session. However, the stock has consolidated, and it is up by 1.9% over the past 24 hours. At this time of this report, AMC is trading above $53 per share.

AMC Enjoying A Stellar Year

AMC is one of the best-performing stocks so far this year. Similar to GameStop last year, AMC has been caught up in a trading frenzy amongst retail traders that leverage Reddit to boost their stock picks.

So far, AMC’s stock price is up by 2,350% year to date, causing the company’s market cap to rally past $26 billion. AMC was planning to issue more stocks and raise money to enable it to undertake potential acquisitions. The company had intended to acquire ArcLight and Pacific theater locations that underperformed during the pandemic. AMC also said the extra funds would be allocated to pay down debt, reduce interest costs, or pay off millions in unpaid rent.

AMC has been using stock sales in recent months to raise fresh capital. According to the company, without the additional funds, it would have gone bankrupt by now.

GameStop Pushes Analysts Away With Rock Star Status

GameStop, which is the engine on the meme stock train, has triggered some more fallout in the investment landscape. Most recently, another Wall Street analyst has jumped ship, pausing coverage on the stock as several others did before him. This time it’s Colin Sebastian, senior research analyst for internet and digital media at Baird.

Sebastian has reportedly placed a hold on his coverage of GameStop. He had a neutral rating on the stock with a USD 25 price target attached compared to the stock’s current price of USD 210. He blamed the fact that the stock has been trading on social media sentiment instead of its financial condition, interfering with his ability to provide a “reasonable” rating on shares.

In addition to the meme stock influence, there has been frustration about a lack of details surrounding GameStop’s transformation to a more digital-friendly platform. The gaming company, which is known for its brick-and-mortar locations, recently tapped Amazon alum, Matt Furlong, as its new CEO.

Sebastian is not the only Wall Street expert to turn their back on the stock, as the field of analysts has been whittled down to a trio of analysts from nine, as Barron’s pointed out. Shares of the gaming retailer might be down 1% today, but they have rallied more than 1,000% year-to-date. GameStop has shaved about 6% from its market cap during the month of June.

Short Interest

Short interest in GameStop stock hovers at USD 1.76 billion, according to Predictive Analytics managing director Ihor Dusaniwsky. He details that there are more than 8 million shares shorted, with close to 15% of short interest compared to the float.

Broker Bluff

Meanwhile, there is some controversy surrounding UK-based trading and investing app Trading 212. Social media is looking for clarity on how the broker is treating GameStop shares.

Based on user documentation on social media, it appears that Trading 212 is now requiring that users with GME shares allow the broker to lend out the shares or face the consequences. According to Charles Payne, who is at the helm of research firm Wall Street Strategies, those consequences seem to include liquidating, or being “restricted to only closing or selling the position.”

GameStop stock appears to be the main target, and users of the platform are crying foul.

AMC Rallies as Moviegoers Return and Meme Stock Disruption Persists

Movies appear to be making a comeback. AMC Entertainment today announced some good news that sent the meme stock soaring by a double-digit percentage at one point. The stock has since retreated slightly but remains one of the top meme-stocks today.

AMC attracted 2 million people to its U.S. theatres in the four-day period leading up to June 27, revisiting pre-pandemic visitation levels. Including international theatres, attendance was 2.5 million moviegoers.

Adam Aron, CEO of AMC, said that both attendance tallies set new records since the movie chain reopened its doors in a post-pandemic world. In particular, “F9: THE FAST SAGA” generated USD 70 million in ticket sales for AMC, and the summer blockbuster season is just kicking off.

AMC Stock Bump

AMC stock has been meandering below and above the USD 60 level all month and is currently within reach of the psychologically important threshold once again. At last check, shares of AMC are up 7% to just below USD 58 after surpassing USD 59 earlier in the session. If movie demand persists, the company has a shot at cleaning up its balance sheet, which is ridden with USD 5.5 billion in long-term debt.

 

Options activity is robust, with 221K contracts traded an hour into the session, close to three-quarters of which are calls with the balance being bearish puts.

Hedge Fund Executive Shuffle

Hedge funds have lost billions of dollars so far this year as retail investors have piled into meme stock names that sophisticated traders were shorting. Melvin Capital is one of the hedge funds that experienced major losses as a result of the run-up in meme stocks. The fund reportedly saw its fund shrink by approximately 45% this year as a result of its exposure to meme stock GameStop.

Melvin Capital was reportedly kept afloat thanks to a USD 2.75 billion capital injection by Point72 Asset Management and Chicago-based Citadel. As fate would have it, Citadel’s deputy global treasurer, Michael Kurlander, has left the firm, according to his LinkedIn profile, as of this month. He is now serving as the CFO at Pagaya, a fintech company with a focus on risk analysis.

While at Citadel, Kurlander was engaged with “risk management financial modeling.” Kurlander’s reasons for switching firms after almost four years at Citadel are unclear, but after the meme stock movement, risk analysis may have taken on a whole new meaning.

Stocks Gear Up for Monday After Record-Setting Performance

Stocks rallied on Friday as investor fears about inflation faded even after the Federal Reserve turned unexpectedly hawkish recently. The S&P 500’s modest gains were enough to send the index to yet another record high, reaching 4,280.70.

Financial stocks helped to catapult the broader market index higher after banks passed the Fed’s stress test with flying colors, giving them the all-clear to distribute dividends and buy back shares once again. May personal consumption expenditures, data that monetary policymakers use to gauge inflation, rose 3.4% YoY, as expected, which helped to tame inflation worries.

The S&P 500 advanced 2.7% for the week, its biggest weekly gain since early 2021. The Dow Jones Industrial Average also closed in the green, fueled by gains of more than 15% in apparel stock Nike. Meanwhile, the Nasdaq took a slight step backward after feeling pressure from higher bond yields.

In early Sunday evening, stock futures are higher across the board as investors look to keep the rally going and potentially send the S&P 500 to another new peak. This week, all eyes will be on Friday’s employment report, but there are some stocks to keep an eye on in the interim.

Stock Spotlight

Nike might have risen by a double-digit percentage on Friday, but there could be more room for this growth stock to run. Not only did Nike see its quarterly revenue about double YoY, but both the company and Wall Street expect the good times to continue.

UBS analysts said in a report that Nike has not yet reached a top, as the company continues to benefit from a shift in consumer behavior toward healthier habits as well as its own digital push. UBS has a price target of USD 185 on the stock, which closed last week at USD 154.

Other Stocks to Watch

  • GameStop muscled its way into the large-cap scene. As expected, the meme stock was added to the Russell 1000 index after qualifying once its market cap ballooned by billions of dollars YTD.
  • On the earnings front, Bed Bath & Beyond, which has attained meme stock status among retail investors, will report its quarterly earnings on Wednesday.

Look Ahead

On the economic front, there are a handful of indicators to watch out for. On Thursday, the Construction Spending report will be released for May. Also on Thursday, investors will get a read on ISM Manufacturing for June after the index beat estimates in May, climbing to a reading of 61.2.

And finally, on Friday, the employment report for June will be released after the economy added nearly 560K new jobs in May. Wells Fargo predicts that the economy added 750K non-farm payrolls in June, according to a report.

Virgin Galactic Revisits Multi-Month High, Investors Clamor for More

Retail investors on the WallStreetBets Reddit forum want to know if it’s too late to place a bet on Virgin Galactic. Shares of Richard Branson’s space travel company have skyrocketed by a double-digit percentage today to February highs after aviation regulators gave the go-ahead for commercial flights to space. The FAA’s approval comes on the heels of a successful test run last month.

Most investors on Reddit are kicking themselves for not jumping on this meme-stock bandwagon sooner. Others are reassuring one another, however, that there are likely more gains to come as Virgin Galactic begins scheduling flights. The company is planning more test flights for the summer months. After seemingly being stuck at the USD 53 level, shares have suddenly surpassed the USD 54 threshold, rising 34%. Volume is robust, with 199 million shares changing hands compared to an average of 20.4 million.

Race to Space

The expansion of Virgin Galactic’s operator license to include customers thrusts Branson into the center of a billionaire rivalry, with Jeff Bezos and Elon Musk similarly looking to be first-movers into the space tourism market. Bezos is looking to do so with his company, Blue Origin, while Musk is at the helm of SpaceX. All three of them have been investing heavily in their space companies, and the latest development is quite the coup for Branson.

Short Strategy

Virgin Galactic recently achieved meme-stock status due to a target on its back among short-sellers. The stock has short interest of 22.35% of its free float, according to financial analytics firm Ortex.

In recent weeks, short-sellers lost a combined sum of USD 3 billion after placing bets on a trio of meme stocks — AMC Entertainment, GameStop and Virgin Galactic, according to Ortex data. Options activity is high, with more than 930,000 contracts trading today at last check, three-quarters of which are bullish call options while the rest are bearish puts, as per Market Rebellion data.

The million-dollar question that investors want to know is whether Virgin Galactic will continue to rally on Monday. If the call volume in the stock is any indication, traders expect SPCE likely has some more runway for gains in the short-term, at least. The stock certainly has momentum on its side.

Meme Stocks GME, WISH Give Investors Something to Talk About

A couple of meme stocks are trading mixed as investors juggle internet sentiment and good news. Both GameStop and ContextLogic are giving investors something to potentially look forward to. GameStop shares are trading in the red while ContextLogic, a mobile e-commerce company, has most recently flipped green.

For GameStop’s part, it experienced a near doubling of its U.S. seaborne imports of gaming peripherals between March and April of this year compared to the same period in 2020. Imports were reportedly up almost 40% compared to the prior three-month period, all according to data by S&P Global Market Intelligence arm Panjiva cited by Barron’s.

GameStop’s suppliers look mostly to Asia to build the products that the gaming retailer, in turn, buys from them, according to the company’s latest annual report. Rising imports could suggest higher demand now that GameStop is making efforts to make the company relevant again. GameStop shares are down nearly 3% as short-selling ratios and options data continue to drive the price.

Short-Term Trade or Long-Term Play

As an early meme stock, GameStop’s stock has been acting more like a short-term trade than a long-term investment based on any fundamentals. But The company is using the spotlight as a springboard to keep the momentum going even after the meme movement fades.

In recent days, GameStop issued 5 million shares at about USD 225 per share. It was only two years ago that the gaming retailer was buying back its own shares at around USD 5 per share, which is a reflection of retail investor influence.

Wishful Thinking

ContextLogic, which recently reached meme-stock status, is reopening its offices in San Francisco for employees in the Bay area to return if they choose. ContextLogic, which has 1,100 employees, is giving its staff a choice of whether they’d like to continue working remotely, return to the office or a combination of the two.

The company, whose stock has rallied 25% in the past week, also revealed that it will be adding more than 650 jobs in more than a dozen countries this year to keep up with its growth. The latest hires will be on top of a 25% increase in its staff year-to-date. Individual investors are targeting the USD 14-16 range for the stock, which is currently trading at just under USD 14 per share.

GameStop Investors Flex Their Muscles amid Shuttered Hedge Fund

Reddit investors pack a powerful punch, just ask hedge fund managers. London-based White Square Capital is shuttering its operations after losses it suffered early in the year from popular meme stock GameStop, according to a report in the Financial Times, citing people close to the situation. White Square, which was founded by Florian Kronawitter, an alum of Paulson & Co, was reportedly short GME.

White Square was among the hedge funds to bet against GameStop just about the time that the WallStreetBets revolution was taking hold. The hedge fund got caught in the crosshairs, reportedly experiencing a double-digit percentage decline from the bet and derailing its assets under management (AUM), which at their prime were USD 440 million.

‘Long/Short Model Challenged’

Not only have retail investors succeeded in outtrading hedge fund managers, but they have managed to compromise one of the tried and true strategies — equity long/short. Kronawitter reportedly stated:

“The decision to close down is related to thinking the equity long-short model is challenged.”

The FT source suggests that meme-stock investors were not to blame for White Square’s demise. Meanwhile, White Square’s pain isn’t translating to GameStop’s gain, at least not today, with shares currently trading lower by about 1%. Year-to-date, however, the stock has rallied more than 1,100%.

Bad Timing

January 2021 was a painful month for short-sellers in GameStop stock. In the month, GME shares suddenly skyrocketed from USD 17 to almost USD 500 at the height of the mania, as retail investors on the WallStreetBets Reddit forum banded together and blindsided short-sellers.

Their strategy worked, as retail investors’ profits skyrocketed at the expense of short-selling traders. The target list of highly shorted stocks has since expanded to include movie chain AMC Entertainment, antiquated (but trying to stay relevant) mobile device maker BlackBerry and others. White Square investors will be getting their money back as the sun sets on the firm’s flagship fund.

Risk On

GameStop’s short volume ratio is currently 23%, compared to a lesser 21% for meme stock cousin AMC Entertainment. according to Fintel data. Meanwhile, the volatility in the equity markets is expected to persist for the foreseeable future.

Investors have money to burn, after depositing USD 18.5 trillion into bank accounts in Q1 2021 compared to USD 15.8 trillion in the prior-year period. And with such meager returns from savings accounts, equities — including risky meme stocks — remain a compelling option for consumers hunting returns.

Why GameStop Stock Failed To Settle Above $225 Today

GameStop Gains Ground After Company Completes “At-The-Market” Equity Offering Program

Shares of GameStop gained upside momentum after the company announced that it had completed its “at-the-market” equity offering program.

On June 9, the company announced that it would sell up to 5 million shares of its common stock through an at-the-market offering. The stock has immediately found itself under pressure and moved from the $300 level towards the $200 level.

As it turns out, GameStop actively sold its shares and has already completed the program. The company stated that its gross proceeds from the “at-the-market” program totaled $1.126 billion, so GameStop sold its shares at an average price of $225.2 per share.

GameStop stated that the proceeds from the offering will be used for general corporate purposes and investment in growth initiatives.

What’s Next For GameStop Stock?

GameStop stock moved higher after the announcement about the end of the “at-the-market” equity offering program as traders bet that selling pressure will decrease, and the stock will be ready to gain upside momentum.

However, I’d note that the stock has already pulled back from recent highs which were close to GameStop’s average selling price in the “at-the-market” equity offering program. The key risk for GameStop bulls is that market participants will view the $225 level as a “ceiling” since the company has readily sold its shares at this price.

I’d also note that analyst earnings estimates for GameStop have improved in recent weeks. Currently, analysts expect that GameStop will report a loss of $0.31 per share this year. In the next year, the company is projected to report a profit of $0.15 per share.

At the current stock price of about $212, the stock is trading at 1413 forward P/E. While the company’s valuation remains disconnected from reality, GameStop’s near-term dynamics will depend on whether the stock will be able to get above the key $225 level. If the stock fails to settle above this level in the upcoming trading sessions, it may find itself under more pressure.

For a look at all of today’s economic events, check out our economic calendar.

GameStop Raises More Than $1 Billion in Latest Share Offer

The company, whose shares are up more than 960% this year, was the spark in January for a battle casting hedge fund short-sellers against a pack of small-time investors organizing online.

It remains one of the hottest and most visible “meme stocks” and was up nearly 9% in premarket trading on Tuesday.

The company, like others of the social-media hyped stocks that have lit up Wall Street since January, has sold millions of dollars in new stock on the back of what institutional players say are speculative share moves unjustified by their businesses.

Cinema operator AMC Entertainment, another meme play, completed two share issues in three days earlier this month, while Torchlight Energy on Monday upsized its own share sale to $250 million.

GameStop said it would use the net proceeds from the offering, which adds to $551 million it raised in late April, for general corporate purposes as well as for investing in growth initiatives.

The company is trying to pivot to e-commerce and recently hired a former Amazon official as its new chief executive officer to steer it through the transition.

Its shares dipped sharply when it announced the share offer earlier this month and have fallen another 10% since, even after Tuesday’s initial moves.

White Square Capital, a London-based hedge fund that suffered losses betting against GameStop during the first meme stock rally in January, is shutting down, the Financial Times reported on Tuesday.

(Reporting by Eva Mathews and Sagarika Jaisinghani in Bengaluru; Editing by Anil D’Silva and Patrick Graham)

GameStop Flounders but Long-Term Catalysts Remain Intact

GameStop has deepened its technology-fueled strategy as it looks to revive its outdated brand. The gaming retailer has named Amazon alum Matt Furlong, who it recently tapped as CEO, to its board of directors, with immediate effect.

GameStop is looking to harness Furlong’s experience at the e-commerce giant, including his former roles as technical advisor and head of Amazon’s North American consumer segment. He also spearheaded Amazon’s Aussie business “during a period of substantial growth,” according to Furlong’s LinkedIn profile.

Low Volume, Low Conviction

The stock is taking it on the chin in the short term, with shares down more than 6% today. The company’s new digital push, however, could have long-term benefits for the fundamentals as well as the stock price. Trading volume in the stock is lower than usual, with 3.7 million shares changing hands vs. an average of nearly 10 million. Summer trading might have gotten a jump start this year.

GameStop continues to capture the attention of the WallStreetBets crowd. They have made GME one of their most talked-about names today, surpassed by fellow meme stocks BlackBerry, AMC Entertainment and Clean Energy.

GameStop in Your 401(K)?

Meme stocks are starting to pop up in exchange-traded funds, which are popular investment vehicles in retirement schemes such as 401(K) plans. According to a recent report in The Wall Street Journal, investment firms behind actively managed ETFs are jumping on the meme-stock bandwagon in hopes of capturing some of the windfall fueled by retail investors. A couple of these funds include:

  • Qraft AI-Enhanced US Next Value ETF
  • The US Small-Cap Adaptive Multi-Factor ETF by Principal Financial Group

Considering that these funds are actively managed, the portfolio managers are hoping to use their stock-picking skills coupled with technology to ride the meme stock wave before it comes crashing down.

For its part, Qraft uses AI to help time its investments, and it targets value stocks. Meme stock leaders GameStop and AMC recently made their way onto the algorithm’s leading 100 stocks for the month. Principal Financial, meanwhile, takes a quantitative approach, involving more human intervention. GameStop is currently the biggest holding in Principal’s small-cap ETF.

If GameStop succeeds in looking more like Amazon than a brick-and-mortar retailer, shares might not skip a beat when the meme stock craze is eventually over.