GameStop Stock Pulls Back After Burry-Fueled Rally

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GameStop Corp (NYSE: GME) is trading lower Wednesday morning, pulling back after a sharp burst of volatility earlier in the week. The pullback comes as traders digest fresh commentary and buying activity from famed investor Michael Burry and GameStop CEO Ryan Cohen that sent the stock surging earlier this week. Here's what investors need to know. Michael Burry's GameStop Buying Reignites Buzz

In a recent Substack post, Burry revealed he has been accumulating GameStop shares again, saying, "I own GME. I have been buying recently." He argued the stock is trading near one-times tangible book value and highlighted Cohen's long-term capital allocation strategy.

Regulatory filings also showed board member Lawrence Cheng purchasing 5,000 shares for roughly $114,000, adding to a theme of insider accumulation after Cohen bought one million shares last week at just over $21 each. The move lifted Cohen's stake to about 42.1 million shares, or roughly 9.3% of the company.

Ryan Cohen, Berkshire Comparisons And Holding-Company Ambitions

In a separate interview, Burry compared Cohen's strategy at GameStop to Warren Buffett's early playbook at Berkshire Hathaway. He sees GameStop less as a struggling retailer and more as a potential holding company in its infancy, backed by a multibillion-dollar liquidity "war chest" built through past share offerings.

Burry acknowledged Cohen faces a harder path under the scrutiny of public markets and meme-stock notoriety, but argued the risk-reward profile of GME stock is "almost as asymmetric as it gets" in U.S. equities.

Is GameStop's Surge Sustainable Amid Overbought Signals?

GameStop is currently trading 11.1% above its 20-day simple moving average (SMA) and 4.4% above its 100-day SMA, indicating short-term strength. Over the past 12 months, shares have decreased approximately 13.06%, and they are currently positioned closer to their 52-week lows than highs.

The RSI is at 72.44, which is considered overbought territory, suggesting that the stock may be due for a correction. Meanwhile, the MACD is above its signal line, indicating bullish momentum.

The combination of overbought RSI and bullish MACD suggests mixed momentum, indicating that while the stock is currently strong, it may face short-term volatility.

  • Key Resistance: $24.50
  • Key Support: $22.00
Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for GameStop, highlighting its strengths and weaknesses compared to the broader market:

  • Value Rank: 67.89 - The stock is trading at a moderate premium relative to peers.
  • Growth Rank: 96.14 - Indicates strong growth potential compared to the market.
  • Momentum Rank: 24.24 - Suggests the stock is underperforming in terms of momentum.
The Verdict: GameStop's Benzinga Edge signal reveals a mixed outlook. While the strong Growth rank indicates potential, the low Momentum score suggests that the stock may struggle to maintain its current trajectory.

Top ETF Exposure

  • AGF US Market Neutral Anti-Beta Fund ETF (NYSE: BTAL): 0.47% Weight
  • SPDR S&P Retail ETF (NYSE: XRT): 1.54% Weight
  • VanEck Social Sentiment ETF (NYSE: BUZZ): 2.92% Weight
Significance: Because GME carries meaningful weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

GME Stock Edges Lower Wednesday

GME Price Action: GameStop shares were down 1.20% at $23.92 at the time of publication on Wednesday, according to Benzinga Pro data.