Market order vs. limit order: What’s the difference?

Market Order vs Limit Order, divided by an upwards trending arrow on investing themed background
Most major online platforms don’t charge any commission for a market or a limit order, although investors who use a live broker or buy a thinly traded stock may pay a fee for a limit order.

  • A market order is an order to buy or sell a security immediately, guaranteeing an execution but not a price.
  • A limit order is an order to buy or sell a security at a specific price, or better, and isn’t guaranteed to be executed.
  • Each of these order types give investors more control over their money, but they do have their drawbacks.
  • Visit Insider’s Investing Reference library for more stories.

Other than actually selecting specific securities to buy or sell, one of the biggest decisions that investors make is how to get the trade done: with a market order or a limit order. These two order types tell your broker exactly how to execute your trade – selecting the right order type can save you money, or help you snatch up more money on your trade.

Market order vs. limit order: At a glance

Market and limit orders can give investors an added layer of flexibility in their trading decisions. Market orders generally let them quickly execute a buy or sell, while a limit order can ensure that they don’t pay too much for a security, or sell it for too low of a price. Here are the two order types in a nutshell:

  • A market order is an instruction to buy or sell a security immediately, regardless of the current price.
  • A limit order specifies an upper or lower value for a buy or sell transaction.

Let’s take a closer look at each of these order types.

What is a market order?

A market order is an instruction to buy or sell a security immediately. It guarantees that the order will be executed, but does not guarantee the price since the prices of securities are always changing – even as you place your order.

A market order to buy assets generally will execute at or near the current bid – what an investor is willing to pay for to buy the security – while a market sell order usually executes close to the current ask, or the price at which the owner of the security is willing to sell.

But it’s important to remember that the most recently traded buy or sell price may not be the same as your execution price, particularly if the individual stock or the broader market is volatile. “The volume of market orders tends to outpace limit orders,” says Bryan Kuderna, CFP® and founder of Kuderna Financial Team. But it’s not unusual to see an uptick in limit orders during periods of volatility.

Pros Cons
  • Order executes immediately
  • Usually executes at most recent price
  • Will not trigger excess fees
  • Possible pricing surprise

What is a limit order?

A limit order is one type of order that lets an investor set a cap (or “limit”) on the maximum per-share amount they’re willing to pay for a security – or the minimum amount they’ll accept on a sale. Think of it as a kind of fence around the price – a buy limit order or a sell limit order offers individuals more control over their investments. On the buy side, a limit order can only be executed at or below a price set by the investor. On the sell side, the transaction can only go through at a price that’s equal to or higher than the amount set by the investor.

“A limit order gives the investor some control of the price at which they add or remove securities from their portfolio, particularly for volatile stocks,” Kuderna adds. “The pitfall here is that if the security moves in the wrong direction, the investor can miss out on the desired buy or sell price as the order won’t take place.”

So a buy-side investor may try to shave a bit off the current market price with a limit buy order, but miss the boat completely if the stock takes off. On the sell side, someone who wanted to hold out for even a few cents more than the current market value could get stuck with a lemon if the stock price plunges.

While a limit order can be useful in controlling how much you pay for a stock, it doesn’t come without its drawbacks. “[Limit orders] can be more complicated to execute, particularly for thinly traded stocks,” says Kuderna. “This can sometimes result in higher fees and/or specific orders actually not taking place if there’s not enough liquidity in the market when the order is triggered.”

Pros Cons
  • Offers control over price
  • Can be used to buy or sell orders
  • You can add conditional orders for more control over your execution
  • Your order may not be executed if target price isn’t met
  • May be more complicated and incur extra fees
  • Orders may be partially filled

The financial takeaway

Market and limit orders are two types of orders that investors can use to better control how they invest their money and at what price. But these two options do come with some downsides.

The choice of a market order or limit order will depend on the specific circumstances of your trade. Generally, if you aren’t worried about not getting a specific price, a market order will go a long way towards ensuring that your transaction gets executed in a timely manner.

But if you’re concerned about a specific price, a limit order probably makes more sense, since the transaction won’t occur unless you get your price. But it could take longer and you could miss the boat on a fast-moving stock or a volatile market. Before going with a market or limit order, consider how these and other related issues fit into your investment strategy.

What is a stop order?What is a limit order?What is a put option? Understanding how to trade themWhat is a call option?

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Stock trading: How to get started for beginners

Shaking hands trading stocks on blue background with yellow stock line 2x1
Trading requires a lot of time to follow the markets and spot opportunities to make a profit.

  • Stock trading involves buying and selling stocks for profits within a short time period.
  • Trading is a risky venture, and to do it successfully requires time and a deep understanding of the market.
  • Trade smarter by setting your budget, risk tolerance, and trading strategy ahead of time.
  • Visit Insider’s Investing Reference library for more stories.

We all want to be the next person to win big with a lucky stock trade. Unfortunately, this isn’t in the cards for most traders. In reality, it takes a lot of knowledge, research, discipline, and patience to become a profitable stock trader.

“Investing is not about getting rich quick. Investing is about getting rich slowly,” says Randy Frederick, vice president of trading and derivatives at Charles Schwab. These are wise words to live by if you’re new to the stock market and wondering if trading is right for you.

But if you’re curious about the so-called thrill of short-term buying and selling and the potential profits that can come along with it, here are the basics of stock trading and the steps that will help get you started.

What is stock trading?

Stock trading entails buying and holding stocks for a short period of time in order to turn a quick and significant profit. Traders aim to take advantage of short-term pricing fluctuations in the market.

Trading can be contrasted with investing, the approach to the stock market that aims to gradually build wealth by holding assets over a long period of time. Whereas investors buy stocks and hold them for many years, traders hold them for only an hour, a day, a week, or a few months.

There are two main types of stock trading: active and passive trading.

Active trading is a highly technical approach with the goal of capitalizing on short-term price fluctuations. Active traders are generally divided into two camps, based on the time period in which they hold their securities:

  • Day traders: Day trading refers to any strategy that involves buying and selling stock over a single day, such as seconds, minutes, or hours.
  • Swing traders: Swing trading involves buying securities and holding them for days or weeks.

Passive trading focuses more on stocks’ long-term trends, rather than short-term fluctuations or market news. Position trading is a type of passive trading.

Passive traders buy based on overall market trends, and sell when they believe the security hits its peak, which can take months. They generally trade less than active traders. In this way, passive traders are more akin to long-term investors who follow a buy-and-hold strategy.

What to know before you start trading

Stock trading is a tricky business. Yes, trading individual stocks can be exciting and profitable, but no one will tell you it’s easy. Here are a few things to keep in mind:

Successful trading takes time and commitment. If you’re just starting out in trading stocks, it’s best to avoid day trading and consider longer-term strategies. “Day trading is actually the worst option for beginner investors,” says Frederick. In reality, for every person who makes millions off of a lucky trade, there’s thousands of others who lost money trying the same tactic.

Whether you plan to trade full-time or part-time, the bottom line is trading requires a lot of time to follow the markets and spot opportunities. And when it comes to trading within short-to-medium timeframes, timing can often be everything.

Trading has tax implications. Don’t let the thrill of making a quick buck distract from your obligation to the IRS. It’s important to understand how taxes on trades could affect your tax bill.

When you sell your stocks for a profit, you are subject to capital gains tax. While profits on stocks held for more than a year get a special tax rate – meaning you’ll most likely pay lower taxes – profits on stocks held for less than a year are taxed at the same rate as your regular income.

Knowledge is power for trading safely. Instead of blindly pursuing “hot” stock tips from a neighbor or recommendations from Wall Street analysts, it pays to develop your own trading ideas. When you study historical stock movements and research an investment yourself, you’ll be able to ride market volatility or formulate an exit strategy with confidence.

Moreover, experts agree that one of the worst things you can do is let your emotions or bias influence your investing decisions. Excessive emotional trading is one of the most common ways investors damage their returns.

How to get started trading stocks

Now that you’re armed with the stock-trading basics, it’s time to get into the real deal. Just make sure you take your time to learn the ropes. “Dip your toe in,” Frederick says. “Don’t dive in.”

1. Open a trading account

You will need a broker to make trades, so you’ll want to find one that you like and trust. There are several brokers to choose from, each with their own specialties.

As you decide on a broker, choose one with the tools, features, and interface that best complement your trading style and know-how. Other things to consider are fee structures, on-the-go accessibility, stock analysis tools, and educational resources. In the end, beginner traders will want a firm that has a wide offering and that will be there when times get tough.

If you’re not sure where to begin, see our recommendations for the best stock trading apps.

2. Set your budget

Set a trading budget for yourself and stick to it. Frederick suggests that if you’re drawn toward shiny new investments or companies, allocate up to 1% or 2% of your investment budget toward those assets. You can start trading with just about any amount, but don’t touch money you might need in the short-term, like for mortgage payments or emergencies.

3. Learn the basic types of stock analysis

Generally, trading relies on “technical analysis,” or making decisions based on stock price and historical market data, rather than “fundamental analysis,” which involves evaluating a company and determining its true worth.

The goal of technical analysis is to analyze price movements of a security in an attempt to forecast future price movements. While a technical analyst may look at statistical trends and patterns with charts, a fundamental analyst will start with a company’s financial statements.

While the two styles of analysis are oftentimes considered as opposing approaches, it makes financial sense to combine the two methods to give you a broad understanding of the markets to help you better gauge where your investment is heading.

In short: Any time well spent learning the fundamentals of stock trading is time well spent.

4. Practice with a stock market simulator

As you begin improving your analytical skills, you can easily put them to practice. Give stock trading a try without putting real money on the line with virtual trading, or paper trading. Virtual trading allows you to test your trading skills in a low-stakes environment.

Reputable online programs include TD Ameritrade’s paperMoney, MarketWatch’s Virtual Stock Exchange, and Power E*TRADE.

5. Plan your first trade

Once you fund your brokerage account and you’re ready to place your first trade, it’s time to drum up a plan, which will help you maintain discipline and consistency as a trader.

A good trading plan typically outlines entry (buy) and exit (sell) points, informed by your skill level, risk level, and your overall goals. Keep in mind that every position you hold will most likely come with its own technical parameters – so keep in mind the time and effort you’ll need to give each stock the attention it deserves.

The financial takeaway

Stock trading isn’t for the faint of heart. There’s much to learn and determine before you even get to placing your first trade. Always remember that stock trading is a risky business where your money is always at stake. Stick to your strategy, and don’t let your emotions or overhyped stories get the best of you. Success isn’t guaranteed, but with patience and luck, you just might find yourself a stock-trading expert in no time.

When you buy through our links, Insider may earn an affiliate commission.

What is insider trading and when is it illegal?What is a limit order?How stock quotes can better inform your investing decisionsIs Robinhood safe? Experts weigh in on using the commission-free investing app

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Bill Gates transferred another $2 billion worth of stock to Melinda, taking total transfers since their divorce announcement to about $6 billion

bill and melinda gates
Melinda French Gates and Bill Gates.

  • Bill Gates transferred more than $2 billion worth of stock to Melinda French Gates on Thursday.
  • This included shares in AutoNation and Canadian National Railway, Bloomberg first reported.
  • French Gates has received about $6 billion worth of stock in transfers since the couple’s May divorce announcement.
  • See more stories on Insider’s business page.

Bill Gates transferred more than $2 billion in stock to Melinda French Gates on Thursday, as first reported by Bloomberg.

This takes total transfers from Gates to French Gates since the couple announced their divorce in May to about $6 billion.

Cascade Investment, Gates’ investment vehicle, transferred 3.3 million shares, collectively worth $387 million, of the automotive retailer AutoNation to French Gates, a SEC filing showed, per Bloomberg.

The Microsoft cofounder also transferred 2.8 million shares worth a total of $1 billion of the manufacturer Deere & Co. to French Gates through Cascade Investment, per a SEC filing cited by Bloomberg.

The same day, Cascade Investment transferred 9.5 million shares, valued at more than $1 billion total, of Canadian National Railway to French Gates, per Bloomberg.

Insider contacted Cascade Investment and a Gates representative for comment on the transfers, but did not immediately receive a response.

Gates and French Gates officially divorced last week. Four days after they announced their intention to divorce, in May, Gates transferred $3 billion worth of stock from Cascade Investment to French Gates, including 2.9 million shares of AutoNation, 14.1 million shares of Canadian National Railway, and 293.5 million shares of the media company Grupo Televisa.

Two weeks later, Gates conveyed $850 million worth of Deere & Co. shares to French Gates, according to a SEC filing – this was 7% of Gates’ stake in the company.

Gates and French Gates’ collective net worth is about $152 billion, according to the Bloomberg Billionaires Index.

Gates on Wednesday told CNN that he and French Gates would try to keep working together on their foundation after their divorce.

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What is a stop-limit order?

Photo showing the midsection of a woman showing a stop gesture to a businessman giving her an envelope on an office desk.
When setting up a stop-limit order, the stop price and limit price don’t have to be the same amount.

  • A stop-limit order is a type of trade that combines stop orders and limit orders into one.
  • Stop orders set a price to execute an order and limit orders specify how much should be bought or sold at that set price.
  • Not all stop-limit orders will execute and there are risks investors should be aware of.
  • Visit Insider’s Investing Reference library for more stories.

A stop-limit order is a way for investors to exert control over their trades while also managing levels of risk. There are two aspects of a stop-limit order: the stop price and the limit price. The stop price states that you’ll buy or sell at a specific price. The limit price sets a standard for buying or selling an amount of stocks when the price reaches the set price.

Here’s what to know about this conditional trade type and how it’s used.

What is a stop-limit order?

A stop-limit order is a financial tool that investors can use to maximize gains and minimize loss. The Securities and Exchange Commission (SEC) describes a stop-limit order as combining both stop orders and limit orders, which exist individually, into a single tool which investors can use as part of their risk-mitigation strategy.

Stop orders, sometimes referred to as a stop-loss order, is when you set a specific stop price on a stock. Once that stop price is reached, an order is executed to buy or sell a stock. That order then turns into a market order – actively trading on the market right away.

A limit order is a type of order where you buy or sell a stock at a certain price. So if you wanted to buy shares of a stock for $20, you could place a limit order of that amount and the order would take place only if and when the stock price was $20 or better.

Stop-limit orders merge two benefits from stop orders and limit orders into one financial tool. The stop order sets a price to execute an order and the limit order specifies how much should be bought or sold at that set price.

Stop orders alone turn into a market order trading immediately, whereas a stop-limit order turns into a limit order that will only be executed at a set price or even better.

“A stop-limit order is an order to buy or sell a stock at the market when it reaches a specified price, but then as soon as the stock has been bought or sold, the order becomes a limit order for an amount below the triggering price,” explains Jenna Lofton, a former Certified Financial Advisor with an MBA in Finance and founder of StockHitter. “This type of order gets one last chance to fulfill before it’s canceled without any execution. It helps protect against whipsaws and sudden spikes – especially on highly volatile stocks.”

Understanding how stop-limit orders work

Stop-limit orders combine the features of stop orders and limit orders to create a powerful strategy for investors to control costs. Investors need to set two price points:

  • The stop price
  • The limit price

The stop price and limit price don’t have to be the same amount. The stop price you set triggers execution of the order and is based on the price that the stock was last traded at. The limit price you set is the limit that sets price constraints on the trade and must be executed at that price or better.

“When trading, you can observe the market price and decide to buy or sell at any given moment, or you can condition the process so that it only activates once the price hits or exceeds the price point A (the stop) but does not break through the price point B (the limit). The latter option is called a stop-limit order,” explains Adam Garcia, founder of TheStockDork.com. “So you’re basically looking to buy the stock once it starts getting on an upward trajectory. On the other hand, there’s only so much that you can afford to pay, which is why you need to cap it.”

Let’s say you have a stop price of $50 on a sell stop limit order and your limit price is $45. If market conditions are appropriate and the price of a stock reaches $50 it would trigger a limit order that would only activate at the limit price of $45 or better.

An investor can execute a stop-limit order on their trades through their investment brokerage firm, though not all brokerages may offer this option. Additionally, brokerages may have different definitions for determining if a stop or limit price has been met.

Traders set a period of time when the stop-limit order is effective or can choose from good-til-canceled (GTC) option. Through these options, the stop-limit order is active until the price is triggered to buy or until the transaction expires. Stop-limit orders are executed during market hours.

You set a stop price which triggers the execution of an order. The limit price helps lower risk by stating that orders must be traded below or up to the limit price.

“You need to specify the timeframe in which this trade is going to be executed. But considering that this trade is conditioned, there’s no guarantee that it will actually happen. To make matters worse, this timeframe only includes regular trading hours. If a portion of your order gets executed today and the rest of it gets allocated across several days, your broker may charge several commissions instead of just one,” warns Garcia.

Pros and cons of stop-limit orders

Before deciding if a stop-limit order is a good strategy for you, consider the pros and cons.

Pros Cons
  • Offers more control and flexibility around costs
  • Can help lessen risk
  • You can use a buy stop limit or sell stop limit
  • Orders may not go through, depending on price
  • Can result in “partial fills” where not all of your orders actually execute

  • Brokerages may not offer this or have different standards

The financial takeaway

Using stop-limit orders as part of your investment strategy is one way to have greater control over how you invest and at what cost. You can set limits for both buying and selling and set parameters for executing orders on your terms.

While this strategy has its benefits, you should be aware that price fluctuations throughout the day can trigger an order and be “substantially inferior” to the closing price of the stock for that day, according to Investor.gov.

Be sure to check if this option is available at your brokerage firm and how they define prices so you know when your order would execute.

What is a broker? What to know about the intermediary that helps investors buy stocksA comprehensive guide to investing in stocks for beginnersWhat to know about swing trading and how to minimize risks of this speculative trading strategyWhat to know about speculation: When investors buy high-risk assets with the expectation of significant returns

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Incoming Amazon CEO Andy Jassy’s newest stock award tops $200 million. This is how his Amazon holdings compare to Jeff Bezos’.

Andy Jassy Jeff Bezos
Andrew Jassy and Jeff Bezos.

  • Amazon has granted incoming Amazon CEO Andy Jassy 61,000 shares.
  • The grant, worth about $214 million at Friday’s close, will vest over 10 years.
  • Jassy on July 5 will take the helm of the company as CEO Jeff Bezos steps down.
  • See more stories on Insider’s business page.

Incoming Amazon CEO Andy Jassy’s newest stock award totaled more than $214 million, a high-dollar payout that would vest over 10 years, but still paled in comparison with founder Jeff Bezos’ company holdings.

Amazon on Friday filed paperwork with the Securities and Exchange Commission (SEC) detailing Jassy’s newest award of 61,000 shares. Amazon stock ended the week at $3,510.98 per share, placing Jassy’s new grant just above $214 million.

Jassy’s total Amazon holdings before the award were worth about $270 million, according to an Insider analysis of his SEC filings.

He owned about 0.02% of Amazon stock, according to FactSet data reported by CNBC on Friday.

Bezos, who plans to step down as chief executive on July 5, holds about 10.3% of the company and more than 50 million shares, according to Markets Insider.

Bezos’ Amazon stake totaled about $170 billion in May. He sold about $10 billion in stock in 2020.

Wall Street analysts’ average price target for Amazon’s stock was $4,241.33, about 21% above Friday’s close, according to Yahoo Finance.

The stock ticked up 2% in after-hours trading on Friday.

Jassy sold about 460,000 Amazon shares over the last 15 years, according to Insider’s analysis. If he hadn’t sold those shares, his holdings would have been worth about $1.8 billion in February, it said.

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Bill Gates reportedly transferred another $850 million in shares to Melinda, taking total transfers since their divorce to nearly $4 billion

2021 05 03T214707Z_584346641_RC2L8N95S48I_RTRMADP_3_PEOPLE BILL GATES DIVORCE.JPG
Bill and Melinda Gates are divorcing after 27 years of marriage.

  • Bill Gates transferred $850 million in shares to Melinda French Gates last week, the Wall Street Journal reported.
  • The reported transfer of shares in the equipment manufacturer Deere equates to around 7% of Gates’ stake in the company.
  • French Gates has now received nearly $4 billion worth of stock from Gates since their divorce announcement.
  • See more stories on Insider’s business page.

Bill Gates has transferred $850 million more in shares to Melinda French Gates amid the couple’s divorce, the Wall Street Journal reported on Tuesday.

The Microsoft co-founder transferred 2.25 million shares of equipment manufacturer Deere, brand name John Deere, to French Gates through his investment firm, Cascade Investment LLC, on Thursday, according to a securities filing seen by the Journal.

The total value of publicly disclosed transfers to French Gates now adds up to nearly $4 billion worth of stock since the pair announced their split, after 27 years of marriage, on May 3.

The reported Deere transfer equates to around 7% of Gates’s stake in the company.

Gates and Cascade Investment still owned nearly 29.3 million shares – 9.3% of the company – after the $850 million transfer to French Gates, the security filings said, per the Journal.

Cascade Investment didn’t immediately reply to Insider’s request for comment. The holding company also declined to comment beyond the filings to the Journal.

Insider reported on May 7 that three stocks worth a combined $3 billion were transferred to French Gates after the couple’s divorce announcement. These stocks included 2.9 million shares of automotive retailer AutoNation, 14.1 million shares of Canadian National Railway, and 293.5 million shares of media company Grupo Televisa.

Other stocks that French Gates could receive from Cascade Investment include Republic Services and Ecolab, which are heavily owned positions at the holding company.

The couple’s net worth is around $130.5 billion, according to Forbes.

The news of the Deere transfers comes two days after The New York Times reported that Gates pursued women at Microsoft while he was married to French Gates.

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US stocks slump as global COVID-19 cases increase

worried trader
  • The S&P 500 and the Dow on Tuesday continued their slide from last week’s record highs.
  • Global COVID-19 cases are rising, and the US State Department is set to issue a travel advisory.
  • The VIX, Wall Street’s “fear gauge,” was advancing.
  • See more stories on Insider’s business page.

Stocks moved lower on Tuesday, edging further from their strongest levels on record over concerns about rising COVID-19 cases worldwide.

The S&P 500 and the Dow Jones industrial average were in the red for the second straight session after notching record closing highs at the end of last week.

But on the rise was the VIX, Wall Street’s so-called fear gauge. It climbed by the most in three weeks, indicating that investors expect increased volatility over the next 30 days. A recent survey by Allianz found that many Americans want to stay on the sidelines of the stock market this year, worried that volatility will accelerate and hurt their investments.

Here’s where US indexes stood at 9:30 a.m. ET on Tuesday:

The S&P 500’s consumer-discretionary sector was losing the most ground, with airline stocks down after the US State Department said on Monday that it planned to issue a “Level 4: Do Not Travel” advisory for nearly 80% of countries as the coronavirus continues to spread. Shares of United Airlines were lower after the carrier indicated that quarterly losses would continue until air travel recovers to 65% of 2019 levels.

Officials in Japan are weighing a virus state of emergency, and the UK imposed a travel ban for visitors from India because of high case counts there. Argentina is battling another wave of cases.

Elsewhere, Apple will be in focus as it hosts a “Spring Loaded” virtual event at 1 p.m. ET during which it is expected to introduce two iPad Pro models.

Around the markets, a GameStop stake held by Alaska’s revenue department soared by more than 700% last quarter. Alaska also said its Tesla bet had grown to $85 million in 18 months.

Bitfarms, a Canadian bitcoin-mining company, is planning a new mining site in Argentina that it said would be its largest yet.

Gold fell 0.1%, to $1,767 per ounce. Long-dated US Treasury yields rose, with the 10-year yield at 1.61%.

Oil prices rose. West Texas Intermediate crude gained 0.4%, to $63.60 per barrel. Brent crude, oil’s international benchmark, gained 0.8%, to $67.57 per barrel.

Bitcoin rose to $56,079.

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GameStop knows its stock is ‘extremely volatile’ – but leadership says it’s completely out of their control

gamestop store ps5
  • On Thursday, GameStop finally acknowledged the ongoing short squeeze driving its stock price up.
  • GameStop leadership said the stock is “extremely volatile” and out of their control in an SEC filing.
  • The squeeze that began in mid-January has extended into late March, with no signs of stopping.
  • Visit the Business section of Insider for more stories.

GameStop said Tuesday that its stock is -and continues to be – “extremely volatile.”

Moreover, that volatility is “due to numerous circumstances beyond our control.”

The statement in a regulatory filing is the first such statement from GameStop leadership on its ongoing stock price fiasco that’s seen its shares rise as much as 1600% in a matter of weeks.

Under the “risk factors” section of the annual report, the company’s stock volatility is listed as the primary risk factor related to the company’s stock. It specifically cites “short squeezes” as a primary reason for that volatility.

“The market price of our Class A Common Stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control,” GameStop said in the filing.

Gamestop
A 12-month chart of GameStop’s stock value demonstrates the meteoric rises and catastrophic falls of the last few months.

GameStop’s stock value has been explosively unpredictable since mid-January.

Between January 15 and January 27, the price leapt from around $35 to just shy of $350. It’s seen similarly huge dropoffs, but months later it’s still in the $180 range.

The reason, of course, is the much discussed “short squeeze” from a large group of individual investors driving up the company’s stock price in an effort to defeat short sellers betting against the stock. It’s been a major topic of discussion for the past several months for loads of people in media and on Wall Street – except for GameStop leadership.

The company has more or less stayed mum for weeks, and even declined to discuss it on its quarterly earnings call this past week. Instead company leadership focused on the company’s ongoing “transformation” led by Chewy cofounder and former CEO Ryan Cohen.

Since Cohen joined the company’s board in January, taking charge of a “strategic” committee soon after, the company made a string of high-profile hires from the likes of Amazon and Chewy.

It is unclear what Cohen’s specific plans are the future of the company, but he broadly outlined plans in an open letter to the company’s board in late 2020.

GameStop, “needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences,” Cohen wrote in the letter, “not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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With GameStop’s stock price still exploding, the ailing game retailer is considering selling new units to fund its future

WallStreetBets logo
WallStreetBets is the name of the popular Reddit forum where the initial GameStop short squeeze began.

  • GameStop’s stock price is still wildly inflated at just over $180 per share as of Tuesday afternoon.
  • The ailing retailer may take advantage of that inflated price by selling new units, it said Tuesday.
  • Those sales would fund the company’s ongoing “transformation” led by activist investor Ryan Cohen.
  • Visit the Business section of Insider for more stories.

Ailing video game retailer GameStop has yet to cash in on the ongoing stock bubble impact its stock.

As of Tuesday afternoon, GameStop was trading at just over $180 per share – a tenfold increase over where it was before the bubble. But that could be about to change, according to a new SEC filing from GameStop.

“Since January 2021,” the filing says, in reference to when the stock bubble emerged, GameStop leadership has been “evaluating” whether it should “potentially sell shares.”

Read more: These are the kinds of charlatans who show up when Wall Street gets weird

One major issue with GameStop selling its own stock during a bubble is, of course, perception: GameStop leadership knows the current stock value is massively inflated, and selling stock right now could look pretty bad.

The filing acknowledges as much with a list of factors that are impacting its decision, including “capital needs and alternative sources and costs of capital available to us, market perceptions about us, and the then current trading price.”

Any money the company made from those sales could be used “to fund the acceleration of our future transformation initiatives,” the filing says. GameStop is currently amidst a “transformation” led by activist investor, board member, and former Chewy CEO Ryan Cohen.

As the leader of a new committee at the company, Cohen is attempting to do for GameStop what he did with Chewy: take on and defeat Amazon in a specific category of ecommerce.

At Chewy, it was pets. At GameStop, of course, it’s gaming.

ryan cohen millennial activist investor 2x1
Activist investor Ryan Cohen, of RC Ventures, owns 12.9% of GameStop’s shares.

Just over two years ago, in early 2019, GameStop’s stock value fell off a cliff: It dropped from about $16 per share to under $4.

And it stayed in that range for just shy of two years.

Even in 2020, while the video-game business (including GameStop) had huge gains during coronavirus lockdowns, GameStop’s stock price remained in the gutter. As recently as last August, the largest video-game retail chain in the world had a stock value of less than $5 per share.

But in the second half of 2020, with big financial names like Cohen and Michael Burry buying up shares in the ailing retailer, things started looking up. The company’s share value gradually increased until it outright surpassed its pre-collapse value in late 2020.

And then things got really weird: Between January 20 and January 26, GameStop’s stock value leaped from just over $35 per share to north of $140 per share. By January 27, it hit new highs of over $325 per share – an over 8,000% increase from just a few months ago.

Two months later, it’s late March and GameStop’s stock value still hasn’t returned to pre-bubble levels: As of this afternoon, it was trading at just over $180.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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Ulta Beauty tumbles as profit outlook disappoints and CEO Dillon plans to step down

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  • Ulta Beauty dropped nearly 9% on Friday following quarterly earnings the prior evening.
  • Ulta’s earnings-per-share view of $8.85 to $9.30 fell short of Wall Street’s target of $10.61.
  • CEO Mary Dillion will transition to the role of the board’s executive chair.
  • See more stories on Insider’s business page.

Ulta Beauty shares were knocked sharply lower on Friday after the cosmetics retailer’s yearly earnings guidance missed Wall Street’s target. The company also said CEO Mary Dillon will step down from the top role.

The company late Thursday forecast fiscal 2021 per-share earnings of $8.85 to $9.30, which includes the impact of about $850 million in share buybacks. Analysts were looking for earnings of $10.61 per share, according to data compiled by Refinitiv. Ulta’s revenue forecast was $7.2 billion to $7.3 billion, below the average analyst forecast of $7.32 billion.

The company in a separate announcement said Dillon will transition to the role of executive chair of its board of directors, with President Dave Kimbell to succeed her as CEO.

Shares dropped 8.5% to close at $318.15. They fell by as much as 12% to an intraday low of $306.06. The stock has gained about 11% this year and has climbed by 54% over the past 12 months.

“Throughout my time with the company, I have worked closely with our board on strategic succession plans, and I believe now is the right time to begin a CEO transition,” said Dillon in the statement, noting that she had led the company for eight years. Kimbell joined Ulta Beauty as chief marketing officer in 2014.

For the fourth quarter ended January 30, Ulta posted adjusted earnings were $3.41 per share, down from $3.83 per share a year ago but higher than expectations of $2.35 per share. Revenue of $2.2 billion was ahead of Wall Street’s projection of $2.08 billion but down from $2.31 billion a year earlier.

Dillon will be nominated to stand for election to the company’s board of directors at its 2021 annual stockholders meeting to be held on June 2.

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