![]() As the global economy slows and excess market liquidity evaporates (see banks), GME can no longer depend on steady streams of investor equity dilutions to offset its losses. I believe GME is facing a crucial point where investors and analysts must look closely at the company's true financial and operational condition. ![]() ![]() Short interest in the stock remains far below normal before 2020, indicating its squeeze risk is much lower today than it was then. I believe GME is in a critical technical position today as it begins to retrace into its pre-2020 pricing range. At any rate, the long-term trend remains adverse to GameStop's core business model. The growing popularity of Microsoft's "game pass" game subscription service is another major trend against legacy outlets like G ameStop however, it is also creating some potential anti-trust issues regarding the merger. Microsoft's ( MSFT ) ongoing effort to purchase Activision Blizzard ( ATVI ) is expected to rapidly accelerate this trend as Microsoft gains more extraordinary monopoly-like powers over the Xbox's content. Last year, 72% of console game sales were digital, while 90% in total were digital. Unsurprisingly, the company's fundamental profitability has declined since 2021 as more game sales switch toward digital. bear" arguments, which focus on mass sentiment far more than business fundamentals. Much of the media commentary surrounding the stock focuses on the "ape vs. Most of these newer investors were younger men in their 20-the 30s, thus, promoting the value of their personal favorite companies, such as GameStop ( NYSE: GME ).ĭespite the ongoing reversal in value, GME is still worth far more than before the buying spree. As many people spent more time at home, many gambled on "meme" stocks, causing some fundamentally (or nearly) obsolete companies to rise tremendously. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks.In 2021, the stock market was frothy as immense QE and government stimulus money fueled a tremendous increase in asset prices. Larry began writing columns for InvestorPlace in 2015. He has been employed by The Fly and Israel’s largest business newspaper, Globes. ![]() Larry Ramer has conducted research and written articles on U.S. On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. Like many others, I noted that the company had squeezed out a small Q4 profit as a result of cutting costs and asserted that GME is likely to be hurt by the small number of video games currently being purchased in physical form. In a recent column entitled “Why GameStop Investors Probably Won’t Win the Game,” I contended that GME had “paused its e-commerce plans too early, badly undermining the outlook of GME stock” and asserted that the retailer’s longer-term outlook was poor. GME Stock: Questioning GameStop’s Outlook In early trading, AMC stock is climbing 4%. ” However, the company utilized nearly $190 million of cash to fund its operating activities in Q1. Its EBITDA, excluding certain items, came in at $7.1 million, leading CEO Adam Aron to note that “The first quarter of 2023 and fourth quarter of 2022 mark the first two consecutive quarters of positive Adjusted EBITDA since March of 2020. The company’s loss per share came in at 13 cents, 5 cents higher than analysts’ mean outlook. Thus there still may be some shares in “other brokers or dark pools.”īoth AMC and GME stocks are intertwined in the “meme stocks” retail trading crowd.ĪMC reported that its revenue had jumped 21.5% year-over-year to $854 million, $22.7 million above analysts’ average estimate. Its database only shows the number of shares available to short at the leading prime brokerages. Short interest accounted for 21% of GME’s float, and shorts had 21.79 days left to cover.įintel’s data set does have some limitations, however. As a result, GME stock could easily undergo a short squeeze.Īlso increasing the likelihood of a short squeeze in GME are the better-than-expected first-quarter financial results reported by another meme stock: AMC Entertainment AMC.Īs of earlier this morning, there were no shares of GME left to short, according to Fintel’s data. There are no shares of GameStop GME stock left to short, according to Fintel.
0 Comments
Leave a Reply. |