In GameStop’s case, activist investor Ryan Cohen promised a corporate overhaul to refocus the retailer on e-commerce and other non-mall-based activities. For a brief moment, it seemed as if GameStop could relive its glory days of growth… whether in Web3 gaming or non-fungible tokens (NFTs). And as for Troika, the Converge merger would turn negative profits into positive ones as soon as merger costs flowed through. Troika’s forward EV/EBITDA ratio sits at 3.1X, a figure usually only seen in private-market transactions. (To be fair, I also gave a 40% chance that Troika “runs off with all our money” and would just2trade review be worth zero).
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I remember the pages where they featured fanart of video game characters the most. In other words, if GameStop’s business stays on its current trajectory over the next five years, using reasonable assumptions, the implied share price would be no higher than around $13.50—roughly 80% below its most recent price. Using a reverse discounted cash flow analysis, GME’s fair market value is even more troubling than at first glance.
On the other hand, the company has a lot of cash on its balance sheet and a management team that offers little clarity about what it plans to do with that cash, keeping bears uneasy about betting against it. To beat market estimates, GameStop would need to report EPS above 8 cents and revenues over $1.48 billion, implying an annual sales drop of nearly 18%. While this would certainly be bad news for any retailer, as it would mark the sixth consecutive quarter of sales losses—and double-digit declines at that—it’s important to keep the broader context in mind. Many people on the WallStreetBets Reddit forum realised if together they drove up the price, the hedge funds would have to try to buy back shares, to cut their losses, raising the price still further.
They borrow shares in the company and sell them, with a promise to buy them back at a later date. People who buy and sell stocks often bet on which companies won’t do well in the future. If you’re not on Reddit, it’s a social media site – kind of like Twitter or Facebook. You’ve probably stared blankly at your WhatsApp chat as the words “GameStop”, “Reddit” and “stock market” get thrown around the way “pub” and “meet at 8” used to. Although the bungled acquisition attempt saw Spirit shed around 50% of its market value, the stock found a vocal supporter in Barstool Sports founder and owner Dave Portnoy.
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GameStop is exploring investments in alternative asset classes, including crypto and bitcoin in particular, three sources said. Shares of GameStop soared as much as 20% in extended trading following the news. Finally, the cryptocurrency Dogecoin has been top of mind for retail investors in search of the next GameStop stock. The success of this plan relies on the fact that there is a finite amount of physical silver available for purchase. If demand for physical silver increases and supply is limited, prices will go up. While shares did go up significantly for a few days, it wasn’t anything close to the rise of GameStop stock.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about. The reason for the move was not made publicly known, but speculation has begun on social media. “Upon the internal transfer of shares from RC Ventures, an entity holding Mr. Cohen’s personal investments and of which Mr. Cohen serves as the manager and is the sole party with a pecuniary interest, to Mr. Cohen,” the filing reads.
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In other words, it’s a siren’s call for deep-value investors hammer candlestick looking for enormous returns. The Verge has reached out to GameStop and former staff at Game Informer to confirm the news. In an email, Shea said that he can’t comment at this time but encouraged checking out the social media posts of his former colleagues. With the continued shrinking of digital media putting thousands of journalists out of work, especially in video games, it’s incredibly rare that something good happens. While we don’t quite know what form this announcement will take on March 25th, I think we can tentatively say, Game Informer’s getting the band back together.
Forming the backdrop to the exceptional circumstances of GameStop was a cryptocurrency rally that ultimately saw Bitcoin (BTC-USD) reach an all-time high value of $69,000. That crypto rally played a key role in igniting the interest of individuals keen to embrace the world of investing without having to conduct deep market research or wait longer for a substantial return on investment (ROI). In 2022, all that changed when Troika bought out Converge, LLC, an ad tech firm generating around $21 million in profits annually.
The stock trades below its long-term moving averages, signaling a bearish pattern. However, the short-term moving averages suggest the opposite, indicating some potential bullishness in the near-term trend. The genomics stocks RSI (Relative Strength Index), which is calculated based on GME’s price changes over the past 14 days, stands at 43. Since the RSI between 30 and 70 is considered a neutral zone, the stock is neither overbought nor oversold. Video game retailer GameStop Corp. (GME) is set to report its quarterly earnings results next week on March 25, and once again, the ride will be volatile.
What the Charts and Options Are Showing for GameStop Stock
As a result, there’s a consensus that for the current quarter, ending in January 2025 (the holiday season), GameStop could report another profitable quarter—despite declining sales. With GameStop remaining a highly speculative stock, a lack of clear catalysts ahead, and mixed technical signals, I believe this is a time to stay out of the GameStop trade and adopt a Hold position ahead of its earnings report. In March 2023, GameStop decided to leave Ireland after another loss making year accumulated its losses to €45.5 million.
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Certainly, it could go up and generate impressive returns for investors, but there is no guarantee that it will. Soon, novice investors downloaded the Robinhood app and made their very first trades, hoping to get in on what appeared to be a sure thing. The Tesla boss loves a tweet – and when he does, financial worlds tend to take notice. This one-word entry was enough to further send GameStop’s price soaring. If your bet was wrong and the price actually rises instead of falling, you’d lose money.
- A few days later, GameStop confirmed via X that it had received a letter from Strive Asset Management urging the company to adopt Bitcoin as a reserve asset.
- While it’s technically true that meme stocks offer the remote possibility of earning penny-stock-like returns, they mostly seem to function as a source of nihilistic belly laughs for a select community of day traders.
- Based on analysts’ projections for the next three years, GameStop’s revenue is expected to shrink at a CAGR of -7%.
- In February, the prevailing attitude on Wall Street was the share price was slowly finding its natural position.
- If you believe this theory, you should buy GameStop shares before the cash is sent out – and then ride the wave up.
- In December 2023, GameStop’s board approved a new “investment policy.” It allows Cohen, plus two independent board members and other necessary staff, to manage GameStop’s portfolio of securities investments.
- For investors unfamiliar with Troika and TRKA stock, here’s a quick summary.
- Despite GameStop’s sales decline, the company has a relatively strong balance sheet—thanks to stock dilution—and an extra cushion from short sellers since the company operating at breakeven is seen as somewhat stable.
GameStop’s Australian division has been focused on increasing higher-margin merchandise and opening more large format hybrid stores which include both an EB Games and Zing Pop Culture store in a single location. These locations have an expanded selection of merchandise based on both games and pop culture. The Sydney Morning Herald reported the diversification into merchandise through the establishment of the Zing Pop Culture brand in 2014 had been vital in keeping the company profitable. The newspaper reported the greater focus on merchandise allowed the company to tap into the lucrative, higher-margin merchandise market of t-shirts, figurines and bobbleheads. The newspaper noted former staff agreed that the Australian divisions’ merchandise pivot has been key to the divisions survival in Australia’s tough retail landscape.
He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor’s Business Daily, among other publications. As a senior writer at AOL’s DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities. Believing GameStop overpriced, hedge funds had “shorted” the company, betting the share price would fall.
When it comes to playing around with high short interest stocks, unless you are uncommonly lucky, let’s just say the risks greatly outweigh the rewards. Jim came to Nintendo Life in 2022 and, despite his insistence that The Minish Cap is the best Zelda game and his unwavering love for the Star Wars prequels (yes, really), he has continued to write news and features on the site ever since. At least, that’s what is being teased by a recent video from the outlet. The short clip slowly zooms in on the site’s final farewell message — the one you can still find on the now mostly-defunct Game Informer website — as some mysterious synths and chatter happen in the background. “The way the platform works is the content gets served to you based on how many upvotes it has. “Reddit is like the definition of confirmation bias,” Matt Kimbro, from PR company NowADays Media, told me.