Best Buy's stock is rallying amid takeover speculation. But here's the real story.

By Bill Peters

Some attributed the jump in Best Buy's stock to the prospect of a takeover by GameStop, but the analyst who wrote the note that started that speculation says otherwise

Shares of Best Buy are surging amid what one analyst says is unwarranted takeover speculation.

Shares of electronics chain Best Buy jumped on Thursday to become one of the S&P 500's strongest performers, a move some on social media attributed to a potential takeover by videogame retailer and meme-stock name GameStop.

But the analyst research note released Thursday that initially fueled that speculation, from the firm Gordon Haskett, actually said it was still unclear what company GameStop (GME) might have its eye on. And it said recent efforts by GameStop to put its money to work toward a transaction of some kind didn't appear to signal interest in Best Buy (BBY) for now.

Shares of Best Buy were up 5.1% in recent afternoon trading on Thursday but were still down 15.2% over the past 12 months. GameStop's stock fell 2% on Thursday and has dropped 20.3% over the past year.

Best Buy and GameStop did not immediately respond to requests for comment.

In January, GameStop CEO Ryan Cohen told CNBC that the company intended to make a "very, very big" acquisition of a publicly traded company in the consumer space. In Thursday's note, Gordon Haskett analyst Don Bilson said Cohen had secured a large incentive package weeks before.

Because of the way the compensation package is structured, Bilson believes Cohen has an incentive to "swing for the fences" and buy a company that already generates a lot of earnings before interest, taxes, depreciation and amortization, a measure of underlying profitability.

"Far be it for us to know who Cohen is after but it does look like he has put the wheels in motion," Bilson wrote.

He noted that a filing on Tuesday from GameStop (GME), made in conjunction with its quarterly earnings, said that after GameStop closed out its fiscal year, which ran through January, the company put around $700 million in cash into a company account that "is pledged as collateral for certain existing and potential cash or physically settled derivative transactions."

He said that line from the filing indicated that GameStop may have bought a position on swap, and that Cohen likely has a "very substantial economic exposure" to a particular name.

"The billion dollar question is what name that might be," Bilson wrote. "Previously, we have thrown Best Buy's name against the wall and we did see some prime broker action in that name during [the fourth quarter] but that doesn't square with [GameStop] saying it put its money to work after its fiscal year ended."

He believes that whatever Cohen may have bought "should stand out like a sore thumb" when the counterparty discloses its equity holdings in mid-May or discloses a 5% position in a company.

GameStop has faced falling sales in recent years amid a shift toward online gaming. Best Buy's stock put up gains earlier this month after the company's quarterly results, which cleared low expectations from Wall Street. Gaming sales growth slowed, but gains were higher in artificial-intelligence glasses and 3-D printers.

The 20.3% drop in GameStop's stock over the past year comes as the State Street SPDR S&P Retail ETF XRT has rallied 13.8% and the S&P 500 index SPX has gained14.1% over the same period.

-Bill Peters

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03-26-26 1323ET