Major Pump And Dump Warning Includes GameStop





The stock market’s rally to new highs offers upside for companies with strong growth prospects. Conversely, market shenanigans are on the rise. Pump and dump-like activities are even repeating. For example, the meme stock speculation of 2021 made its return twice in the last month.

When Roaring Kitty posted a simple tweet, GameStop (GME) stock soared from below $10 in April to as high as $65.00. The retailer of used gaming goods took advantage of the stock’s rise by selling shares, diluting shareholders, and raising nearly $1 billion. In an irrational twist, markets reacted to the cash raised as a bullish development.

A day before investor Roaring Kitty said he would live stream on Google’s (GOOG) YouTube, GME stock rallied again. This time, shares traded as high as $46.60 on June 6. Once again, management took advantage of the market’s bullishness by reporting quarterly results earlier and announcing another stock sale plan.

The company posted a non-GAAP EPS of -$0.12. Revenue slumped by 28.7% Y/Y to $881.8 million. The firm adjusted its non-GAAP results with items like $4.4 million in transformation costs. The operating loss before adjustments topped $55 million.
Speculators will thrive from the wild price swing in GME stock. Investors should ignore this company and look elsewhere for companies that have better long-term prospects.



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