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Investing.com – GameStop stock (NYSE:GME) traded 0.7% lower in Monday’s premarket trading after Ascendiant Capital cut its target for the meme stock while reiterating its ‘sell’, citing significant digital and execution risks.
The brokerage has now pegged the 12-month target for the stock at $23, down from its previous $24. The stock closed at $152.14 Thursday, down 1.2%.
As reported by StreetInsider, analyst Edward Woo states that the new target reflects the estimated current cash value per share and, “the small chance for a highly successful and valuable company transformation” is offset by the significant risks.
GameStop started the year as the Reddit gang’s favorite meme stock that also fueled its rally by more than 900%, now a subject of probe at the SEC. The rally, a result of coordinated trades among the Robinhood (NASDAQ:HOOD) crowd and subsequent self-fulfilling momentum, created its own legion of followers, putting it at the center of a fight between the big Wall Street institutions on one side and the retail crowd on the other.
In the last year, the company has overhauled its management, raised fresh funds, extinguished much of its debt, and revamped its stores to attract a new audience. But with the year closing now, much that was anticipated from the retailer of video games remains a work-in-progress while it continues to report losses. The stock is now down over 68% from the year’s high, though still up 700% YTD.
The net loss of $105 million in the third quarter — its sixth in the last seven — was wider than expected and also more than five times the loss in the last financial year’s third quarter.
