GME Stock Spotlight: Insider Selling, Rumors and Shorts, Oh My!
If there’s one thing that the market dislikes, it’s uncertainty. And, there’s a lot of uncertainty surrounding video game retailer GameStop (NYSE:GME) in 2023. Sure, GME stock could surge in the year’s second half, but it could also crash.
In the final analysis, the best policy to to just watch and wait from the sidelines.
Could GameStop stock be the target of another short squeeze in the coming weeks? Anything’s possible, but waiting around for a meme stock revival isn’t a sensible investment strategy.
Instead, it’s better to consider GameStop’s challenges, which are considerable, and simply stay out of the trade altogether.
Which Insiders Are Buying and Selling GME Stock?
As you may have heard, GameStop Executive Chairman Ryan Cohen reportedly purchased 443,842 shares of GME stock. Cohen bought those shares on June 9 through RC Ventures LLC for around $10 million.
That large-scale purchase garnered a lot of attention. However, not every GameStop insider is buying the company’s shares in 2023. Recently, Chief Operating Officer Nir Patel sold 122,073 GameStop shares, which were collectively valued at $2.76 million.
In addition, GameStop Chief Financial Officer Diana Saadeh-Jajeh filed to sell 10,484 GME stock shares. However, this represents a proposed sale, and Saadeh-Jajeh reportedly didn’t disclose an actual sale of the shares.
It’s important to keep tabs on insider trading, but don’t over-think it. Corporate insiders sell shares for a variety of reasons. Plus, it’s not unheard-of for an insider to buy shares of his or her own company, only to see the stock lose value.
GameStop: Facts vs. Speculation
It’s not difficult to find commentators speculating on what might happen with GameStop.
For example, one writer suggested that Cohen “is in good position to make a big deal.” The author also stated, “I’d be a bit surprised if he doesn’t try to make an acquisition.”
Meanwhile, according to another writer, some financial traders are worried about the U.S. Justice Department potentially cracking down on allegedly predatory short selling.
If this scenario plays out, GameStop stock would rally as the short sellers would run for the hills.
Or at least, that’s what some speculators could imagine. Personally, I wouldn’t buy or sell GME stock based on these suggested scenarios. Instead, I prefer to stick to established facts.
For example, GameStop fired its chief executive, and has had five CEOs and three CFOs during the past five years. Moreover, the company’s management canceled GameStop’s first-quarter 2023 post-earnings conference call.
GameStop swung back to a net loss in the fiscal first quarter of this year after declaring positive net income in the prior quarter.
I don’t know what I don’t know, but these are facts that I do know, and they’re certainly not encouraging.
GameStop Stock Is Too Risky to Buy or Short-Sell
The known facts pertaining to GameStop make it difficult to hold GME stock with confidence now. On the other hand, short-selling the stock is dangerous, as a meme-stock revival could happen at any given moment.
Ultimately, the best policy is to watch GameStop for further developments but not get involved as an investor. GameStop stock continues to attract commentators and speculators, but sensible traders should take a hands-off approach in 2023.
On the date of publication, David Moadel did not have (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.
