(Bloomberg) — GameStop Corp.’s latest winning streak has catapulted it to the highest in weeks as Chewy Inc. founder and activist investor Ryan Cohen continued to shake up operations at the video-game retailer, taking retail investors by storm.
Shares of the Grapevine, Texas-based company climbed as much as 19% to $231.74 at 9:36 a.m. in New York Tuesday, extending a winning streak for a fifth day. The gain follows Monday’s 41% climb after the company said Cohen would lead a new committee focused on its digital transformation.
Retail investors’ Reddit-driven frenzy has kept its shares afloat despite the broader market’s recent volatility and tech selloff. The stock has soared as much as 96% over five days. While the Nasdaq 100 fell 11% into a correction yesterday, it has rebounded by as much as 2.9% on Tuesday. Even so, GameStop remains far from its Jan. 28 intraday record of $483.
“It is interesting that GameStop has rallied as other momentum favorites are falling,” said Craig Birk, chief investment officer at Personal Capital. “For some, if they have losses in growth stocks, the quickest way to try to recoup them could be to find the most volatile stock.”
While GameStop remains a favorite for day traders, the momentum stock selloff has caught up with Cohen’s former darling Chewy, alongside the likes of pandemic winners Peloton Interactive Inc. and Zoom Video Communications Inc.
It is an inconvenient time for the online pet-products retailer that Cohen founded to take a tumble. The Dania Beach, Florida-based company has shed a third of its value from a Feb. 12 record — that compares to a 335% surge for GameStop over that same stretch.
While Cohen’s push was applauded by investors, some skeptics like Wedbush analyst Michael Pachter said the latest update was expected ever since Cohen took a stake in the company. Instead he credited the stock’s return as a “Reddit Raider favorite” for the rally.
Personal Capital’s Birk said the Cohen news appears positive for the stock but argued that “transformations take time and some fail.”
“It feels premature to assume GameStop’s challenges from a few months ago radically eased,” he said.
(Updates stock movement throughout.)
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