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GameStop (NYSE:GME) has a new hero today. News that famed investor and philanthropist Bill Pulte has invoked a direct stock purchase plan for GME stock via Computershare has the Twitter universe excited.
Earlier today, Pulte posted via his @Pulte Twitter account that he has enrolled in a stock purchase plan. While we don’t know the terms of this purchase plan (such as the size, scale and timing), the fact that Pulte is speaking out in favor of GameStop has retail investors excited. After all, previous investments in the video game retailer by the likes of Ryan Cohen resulted in big rallies.
— Pulte (@pulte) May 17, 2023
Let’s dive into what investors may want to make of this news today.
The Latest Catalysts Driving GME Stock Higher
GameStop is certainly among the more intriguing bets a big-time investor can make. Accordingly, with previous backers taking short-term positions (and pocketing the profits associated), it’s unclear how much credence investors should give to this move.
That said, the fact that Pulte appears to have put in place a plan to buy GME stock over a specified period of time is certainly compelling. As Computershare highlights in its notice on direct stock purchase and dividend reinvestment plans:
“Computershare DirectStock (“DirectStock”) is a direct stock purchase and dividend reinvestment plan that provides an alternative to traditional methods of buying, holding and selling shares in the issuer you have selected.”
Thus, this platform is one that long-term investors typically use to ease into a position over time, riding out near-term volatility.
Speculators don’t seem to be taking the bait in a big way, though. While GME stock is up around 3%, that is nowhere near the moves this meme stock is capable of making.
We’ll see if this move continues to drive the price action for GME stock from here. But for now, GameStop remains too speculative for me.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.