GameStop is widely known as one of the top retailers of online video games and gaming consoles in the US and worldwide. This huge company, which has a market capitalization of $670.255M, operates over 5,500 retail stores in more than 1000 international locations including the United States, Canada, Australia, New Zealand, and Europe.
Though GameStop share has been on a long downtrend for years, it has also been one of the best stocks in the market in 2020 with a Year to Return (YTD) of +70.07% as of September 2020.
In this guide, we show you how to buy shares of GameStop in the UK. We’ll also cover the history of GameStop, analyze its share price performance, and suggest top brokers in the UK that offer GameStop shares.
Contents
If you’re considering adding GameStop to your portfolio, you will need to find UK regulated broker that gives you access to shares listed on US exchanges. This way, you will be able to not only buy GameStop shares but also shares of popular companies such as Amazon, Facebook, Tesla, Alphabet, and many more.
To help you along the way, below you’ll find two of our recommended UK broker that offer investors to buy and sell shares of GameStop.
1. eToro – Buy GameStop Shares with Zero Commission
eToro is one of the most popular trading platforms in the UK and worldwide, offering users a social trading experience with thousands of financial instruments to trade on. If you simply want to buy GameStop shares in a cost-effective way, eToro is among the best options out there. This can be credited to eToro’s zero commission policy. When you buy shares on this platform, you do not have to pay any trading commissions. Instead, you pay the buy and sell spread only.
At eToro, you will have access to 16 different stock exchanges including NYSE, NASDAQ, London Stocks Exchange, etc. This means you will not only have access to some of the best shares to buy, but also to other financial instruments such as ETFs, FX currency pairs, commodities, and cryptocurrencies.
eToro also offers a built-in social trading platform, where you can start discussions with other members, view the market sentiment on any product, and use the CopyTrade tool to mimic trades of other traders. Another key point of eToro is that it allows you to choose to buy shares in the traditional sense or to buy shares through (CFDs). When you trade CFDs, you can leverage your positions with up to 5:1 ratio and short sell the stock without having to maintain high margin requirements.
Signing up with eToro is relatively straightforward and you’ll need to meet a £160 minimum deposit to start trading. When it comes to the security of users, eToro is regulated by the UK’s Financial Conduct Authority and ensures all accounts are secured by the Financial Services Compensation Scheme (FSCS).
Pros:
Cons:
75% of retail investor accounts lose money when trading CFDs with this provider.
2. IG – Trusted Share Trading Platform the UK
Another great option for UK investors to buy US shares is through IG Markets. This stock broker was founded in 1974 and holds licenses from top tier regulators like the FCA, CySEC, and ASIC. Moreover, its parent company, IG Group Holdings plc, is also listed on the London Stock Exchange under the ticker symbol ‘IGG’.
The reason why IG Markets has become one of the top CFD brokers in the industry is the range of platforms and products offered by the broker. IG allows investors to buy and sell more than 16,000 shares from various exchanges, including shares of GameStop. More importantly, it enables investors to trade directly from the exchange, via CFDs, or spread betting. This means you can switch between different methods and find the one that is most suitable for your needs. For example, when buying shares on a spread bet account, you don’t have to pay Capital Gain Tax (CGT) and when buying shares for a long term position, it would be better to do it via the share dealing as you eon’t have to pay the overnight funding.
IG also offers a range of stock trading platforms aimed at different types of clients. For beginners and intermediate traders, it offers its own proprietary trading platform as well as the popular MetaTrader4. More experienced investors can get access to the ProRealTime and L2Dealer platforms. For those of you who are keen to trade on the move, IG also offers a great mobile stock trading app.
Pros:
- Trusted and heavily regulated broker
- Offers spread betting and CFD products
- Access to over 16,000 shares
- Range of trading platforms
- A range of tools and features
- Offers trading during the pre- and post-market sessions
- Regulated by the FCA
Cons:
- Does not offer social trading
- A minimum deposit of £250
GameStop share has posted a return of 70.07% in 2020, outperforming both the S&P 500 and Nasdaq100 indices. But the company is also facing the possibility of bankruptcy and as such, you must perform some independent research before you take an investment decision. In this section of our guide, we analyze the fundamentals of GameStop corporation and find out what are the key strength and weaknesses of this company.
GameStop has been in the online video gaming industry for almost four decades now and is one of the largest consumer electronics and gaming merchandise retailers in history. But in 2020, the company has been on a bit of a comeback mixed with uncertainty. It has already closed 388 stores year-to-date as of September 2020, and there are rumors that GameStop is headed for bankruptcy but at the same time, GameStop is one of the most successful stocks in 2020.
GameStop’s IPO took place in February 2002, at a price of $18 per share. Since then, the share has had two peaks around $60 and it reached an all-time high of $63.30 on December 24, 2007. However, since 2014 the share was trading in a descending triangle pattern up until 2020.
Surprisingly, 2020 has been a big year for GameStop in terms of performance. It is, in fact, one of the few retailers that outperformed the market – The company’s YTD stands on 70.07% and the one-year yield stands at 88.19%. But as the company faces an uncertain future, it is not yet clear whether the stock is in a correction or the surge in price was caused by the recent GameStop’s announcement to compete with Amazon.
Many investors find GameStop as a solid dividend stock as the company was paying a steady annual dividend between 2012 to 2019. The world’s largest video game and entertainment consoles software retailer has paid a dividend of $0.38 in 2019, representing an annual yield of 13.9%. However, the company has recently announced that it would eliminate its dividend payments due to its intentions to re-allocate the capital to reduce debt and provide flexibility.
At present, that is undoubtedly a difficult question. On one hand, GameStop share price is booming and it might be tempting to join the trend. On top of that, investors have high hopes ahead of the launch of two gaming consoles. At the same time, GameStop is in a very dangerous position, and its future is uncertain.
All things considered, we have outlined some of the strengths of GameStop to help you make the right choice.
Launch of New Game Consoles
There are two major gaming consoles that are expected to be launched at the end of 2020, the PlayStation 5 by Sony and Xbox Series X by Microsoft. The company has announced that it is ready for the next-gen console launch despite the challenges caused by the coronavirus pandemic. This can give GameStop a boost in sales in the short term.
GameStop Will Be Attempting to Compete with Amazon
Though many analysts have doubts about GameStop plan to compete with Amazon, GameStop share price surged following reports that entrepreneur Ryan Cohen said the company could compete with Amazon. Cohen, which has recently acquired 10% of GameStop’s total shares, proposed that GameStop’s would offer a wider range of products and merchandise on its website and ship it to customers the same way Amazon does.
GameStop is Still A Massive Company
All in all, GameStop corporation is still a huge company with a market cap of $670.255M and more than 5,500 stores. Indeed, GameStop reported a net loss in three out of the last four quarters, however, it has approximately $570 million in total cash and total debt of $552.2 million, leading to total net cash of $18.1.
Experts still have optimistic predictions for the company’s future. The fact that GameStop stores are closing may lead to panic in the media and among retailers, but it can also contribute to the company’s profitability and hence the continuation of the price surge.
Step 3: Open an Account and Deposit Funds
Now that you’ve done good research about GameStop and its share price performance, you can move on to the next step of opening a share dealing account. In this section, we’ll walk you through the process of creating an investment account with eToro, our recommended broker that offers a commission-free trading platform and access to thousands of UK and US shares.
To get started, visit eToro’s homepage and click on the Join Now button to start the registration process. You’ll then be transferred to a page where you need to pick a username and password and provide your email address.
As eToro is an FCA regulated firm, you also need to provide personal information including your full name, email address, date of birth, nationality, and national insurance number. To complete the registration process, you need to verify your account by uploading a copy of your driver’s license or passport and verify your proof of residence.
Once your account has been approved by eToro, you’ll be able to fund your account using one of the payment methods supported by the broker:
- Debit Card
- Credit Card
- Paypal
- Skrill
- Neteller
- UK Bank Transfer
It’s worth mentioning that eToro requires an initial deposit of £160 for UK investors to start trading.
As soon as the funds have been added to your account, you can make your first transaction. To place a buying order, you’ll first need to log into eToro’s platform and search for GameStop in the search box at the top of the trading dashboard and click on the first result that pops up.
Now, you will be taken to the GameStop instrument page where you can insert a buying order by clicking on the Trade button.
Then, you need to enter the parameters in order to place an order in the market. This includes the amount you wish to invest in GameStop, the order type (market or limit order), and stop loss and take profit (not mandatory). Finally, click on the ‘Open Trade’ button to complete your GameStop share purchase.
Note: If you are buying GameStop shares outside of standard market hours (9.30 am to 5 pm, Eastern Standard Time), you will need to click on ‘Set Order’. Your GameStop shares purchase will then be completed when the markets open.
There is no question that GameStop has been on a long decline. Its business model is outdated and the company, which was a trendy place for gamers and tech enthusiasts for decades, must adapt and make changes. However, the market has different rules. Evidently, the GameStop share has surged during 2020 and the market sentiment remains bullish.
GameStop is currently a speculative stock more suited for active day traders. Even though GameStop has reported disappointing earnings recently and the video game retailer could disappear in the future, the share price may appreciate in the short term. Moreover, GameStop typically achieves greater profitability during the holidays and the new console cycle can help the company turn profitable again.
In one way or another, you must follow the news and be alert with any update about GameStop.
Assuming you do not believe in GameStop’s future, you can also short-sell the stock. When short selling, you basically borrow capital from your broker in order to first sell the shares and then buy them back at a lower price. This basically gives you the flexibility to trade the share in both directions.
The easiest and most cost-effective to short sell shares in the UK is via CFD brokers like eToro or Plus500. A contract for differences(CFD), unlike a traditional bilateral contract, requires low margin requirements and allows you to use high leverage when short selling.
The Verdict
At the time of writing, GameStop is in a limbo stage. But as the company applies a new business model strategy, it could be a good long-term investment, particularly if GameStop decides to repay dividends. Otherwise, it is a great speculative stock to own and it appears to be a classic case of ‘sell the rumor, buy the fact’ stock.
If you think this is the case, you can buy shares of GameStop one of our CFD recommended broker at the click of a button. Simply click the link below to get started!
75% of retail investor accounts lose money when trading CFDs with this provider.
FAQs
What stock exchange is GameStop listed on?
GameStop is listed and traded on the New York Stock Exchange under the ticker symbol NYSE: GME.
Does GameStop pay dividends?
No, GameStop does not currently pay dividends to shareholders of its Common A stock. Since 2012, however, the company has paid a steady dividend and was considered a favorite stock among dividend investors.
What is the minimum amount of GameStop shares I can buy?
The minimum amount of shares you can buy depends on the dealing platform you choose. The majority of brokerage firms maintain a minimum amount of investment that you can buy, mainly because some of these brokers send the order directly to exchanges. If you buy shares via a CFD platform like eToro, on the other hand, you'll be able to invest just from £50 as it allows investors fractional trading.
How much were GameStop shares when the firm first went public?
GameStop went public on Feb. 12, 2002, offering 18,055,555 shares at a price of $18 per share.
