Shares of GameStop (ticker: GME) soared on Thursday, continuing with their previous gain of 29% from the previous season. Despite this, Michael Pachter, an analyst at Wedbush, raised questions about the stock.
“Shares remain at levels that are entirely disconnected from the fundamentals of the business due to ongoing support from eager retail investors,” said Pachter.
He further announced his decision to maintain his Underperform rating on the stock. Wedbush set a 12-month price target of $30 on the shares.
GameStop (ticker: GME) climbed 10.4% on Thursday landing at $127.09. The stock has dropped more than 14% this year.
The company announced the launch of its digital asset wallet for non-fungible tokens and cryptocurrencies earlier in the week. According to Pachter, the digital wallet is unlikely to become the preferred crypto and NFT solution for console and mobile gamers.
“Console and mobile walled gardens are controlled by much larger technology companies that will be unwilling to let a third party such as GameStop capture a meaningful share of consumer spending- on the platform,” Pachter said.