GameStop And RadioShack Rise Amid Potential Buyout Rumors (GME, RSH, BBY)

The Wall Street Journal noted some unusual activity in the shares of GameStop GME and RadioShack RSH on Tuesday. Both stocks are up around 5% on the session in a flat market. It is possible that an an interview with GameStop president Tony Bartel posted this morning is having some effect on trading today. Bartel discussed the company's digital strategy and talked about potentially developing a tablet device strictly for gaming. He also discussed GME's acquisition of Spawn Labs this week. The other theory that the Wall Street Journal postulates is that GameStop (GME) is rising because takeout rumors are making their way around the Street. This also may be happening with RadioShack RSH. Barron's noted over the weekend that “by our count, such a deal has been rumored 13 times in the past 13 months.” The Journal also speculates that any rumors floating around may have been the work of traders looking to exit their GameStop and RadioShack positions. This is, unfortunately, not an uncommon practice, as myriads of rumors are spread in the marketplace on a daily basis. Since both GME and RSH have large short interests, an usual price advance has the capability to trigger even higher prices as short-sellers begin to cover.