GME stock continues to move higher for the fifth trading session after Michael Burry’s disclosure of holding 3 million GameStop Corp. (NYSE:GME) shares through his firm.
As everyone knows, gaming is now big business, and American gaming and gaming merchandise company GameStop is among the most interesting companies in this sector. There have been some very interesting developments with regards to the company, as well, over recent days.
Today, GameStop stock rose by a hefty 15% after it emerged that legendary investor Michael Burry, who has been immortalized in the Oscar-winning film The Big Short, disclosed that he holds as many as 3 million shares of the company. GME stock has been on a recovery phase this week, and the latest development has come as a massive boost.
In an interview with Barron’s, Burry explained the reasons why he has a bullish view on GME stock. Burry observed that the company’s financial health is in great shape and as much as 90% of the stores owned by the company are currently cash-flow positive. On the other hand, he stated that because gaming consoles being manufactured this year are going to be equipped with optical disk drives, this will also significantly improve the life of GameStop.
However, that is not the only positive piece of news that might have a profound effect on the company’s stock price. On Wednesday, GameStop announced that it had completed a major restructuring that is going to eliminate as many as 120 posts at the company’s headquarters. That amounts to 14% of the total employees at the company and is part of the company’s drive to cut costs significantly.
In its statement, GameStop noted that it had gone for these tough measures in order to reduce costs and to align the company in a much better way. It should be kept in mind that GME stock has nosedived by as much as 70% from the start of the year. Hence, the recent movement must have been welcomed by investors.
What do you think about all this?
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