Gamestop?

[gstillson]

I was reading some news and saw some blurb about Gamestop's large cash position.

Evidently they have $1.4B in cash with a current market cap of $1.2B and they are cash flow positive. They also pay some 13% dividend or something crazy.

Anyone have any insight here?

 

[gstillson]

Maybe if they became a Fortnite hub or something

 

[sengsational]

I thought it looked good at about $22, but Mr. Market says it's only worth half of that. Not sure why.


EDIT: Just read that they had a buyout deal that just fell-through, thus the plummet. First order thinking has them as the next Blockbuster chain, but it's possible that they pivot into another business that could leverage all those storefronts.

 

[Aerides]

Wouldn't touch this one. GS has a unique position in the game market because of their high profit margin from buying used/reselling, but overall games move more and more to digital download only year over year. And many more, like fortnite, are free to play with the only transactions being in-game purchases.

There will of course always be some folks who want a hard copy (collectors editions), as well as accessories, consoles, but those can be bought anywhere.

There's a better than zero chance that, in 3-5 years, they become what Blockbuster is to movies.

 

[corn18]

I jut read their 11/3/18 balance sheet and it is showing $454M of cash on hand. But they are carrying a truckload of goodwill ($1.1B) and inventory ($2B). Accounts payable @ $1.5B? At least they don't have a lot of debt, right?

 

[USGrant1962]

If any one's insight can beat the collective wisdom of market and people who get paid to analyze stocks, they are not going to tell you!

 

[sengsational]

I think that there were a bunch of people who dumped the stock when the buyout didn't happen. That pushed the price really low. The buy-out buyers were probably going to pay $20 or something like that. So the "collective wisdom" of the market is, in my opinion, probably fairly inaccurate and based on the emotional let-down of not making a quick killing by holding a buyout stock. I'd honor the opinion of the people considering paying $20 more than the herd that dumped it at a loss when their get rich quick scheme didn't come to pass.

 

[W2R]

If any one's insight can beat the collective wisdom of market and people who get paid to analyze stocks, they are not going to tell you!

+1

From a completely uninformed consumer's viewpoint Gamestop seems to be doing well, and often you just can't beat their online prices and ASAP delivery of new games and consoles to your doorstep, not to mention their extensive buying and selling of used games.

Then a casual search reveals rumors that they are looking for a buyout.

As for inside info, like USGrant1962 says, those who know aren't telling.

 

[dadu007]

Resurrecting this thread:
Anybody in on the recent Wall Street Bets subforum on Reddit and the push for a short squeeze for GME? Interesting to say the least! I read the "DD" (Due Diligence) on WSB and got in at $18/share (late to the party). Stock is now at ~$40...
This is my "fun money" individual stock money, which gives me a cheap thrill without messing with my retirement portfolio, and scratches that stock trading itch.

 

[Koolau]

Resurrecting this thread:
Anybody in on the recent Wall Street Bets subforum on Reddit and the push for a short squeeze for GME? Interesting to say the least! I read the "DD" (Due Diligence) on WSB and got in at $18/share (late to the party). Stock is now at ~$40...
This is my "fun money" individual stock money, which gives me a cheap thrill without messing with my retirement portfolio, and scratches that stock trading itch.

Thanks. Next time someone criticizes my ownership of a few % PMs, I'll just call it my "fun money." Returning you now to our symposium on taking a flyer on an individual stock.

 

[Montecfo]

Resurrecting this thread:
Anybody in on the recent Wall Street Bets subforum on Reddit and the push for a short squeeze for GME? Interesting to say the least! I read the "DD" (Due Diligence) on WSB and got in at $18/share (late to the party). Stock is now at ~$40...
This is my "fun money" individual stock money, which gives me a cheap thrill without messing with my retirement portfolio, and scratches that stock trading itch.

It's interesting. Good time to lighten up.

 

[Running_Man]

Never short a stock with 150% short interest.

 

[dadu007]

Never short a stock with 150% short interest.

Yup. Up 37% today (was even higher earlier). I've never shorted any stock and don't touch options; too scared! I'm long GME. Really interesting to watch (especially if you have even a small position).

 

[Aerides]

The thing about Gamestop that makes zero sense is no one really buys physical games anymore. Their used market is pretty decent, but that relies on people buying discs to re-sell after they've played through the game.

I know they sell consoles too and cater to folks who want to browse titles in person, but still... we are heavy game consumers in this house and visit gamestop far far less than we did even 5 years ago.

IMO they are tomorrow's Blockbuster.

 

[dadu007]

IMO they are tomorrow's Blockbuster.

That's the phrase everyone is using...LOL.
You know Michael Burry (of "The Big Short" fame) has a huge position in GME, right? And that Ryan Cohen (of $3 Billion Chewy.com buyout fame) is now the de-facto leader on GME's board?
I have two gamer sons. They STILL use Gamestop... Gamestop can leverage their physical locations to change the retail gaming space (PC build centers, in-person gaming parties...etc.) The BOD has been revamped by Cohen...I think it's possible after reading up on it...VERY interesting.
OTOH, I could be totally wrong!
If you want a real kick, search for "Roaring Kitty" on YouTube. This guy spent about $50K on options when GME was $4.00. After today, he'll be well into an 8 figure position on GME.
Fun to follow, in any event!

 

[Aerides]

This is why I never buy something that makes no sense. DH and I are first gen gamers - we grew up on Atari. We have every console, and we don't use GS anymore. If DH really wants a physical, it's usually a collector version and he preorders via amazon. He will, on occasion, pick up a small bundle of very cheap resale games at GS, but that's a far cry from days of old. Everything else pretty much is via Steam.

Yes, they could do more with their retail spaces, but they haven't, yet, so I'll stay out and watch from the sidelines. I don't care which big names like them, I'm sure the best investors have some misses from time to time.

 

[dadu007]

Fair enough, @Aerides.
And please know that I'm not being argumentative.

But think of it this way...There is no other countrywide chain of gaming stores for kids and adults to gather at, besides Gamestop. Not that I can think of...Yes, they're closing underperforming stores, but they still have many, many locations. After we're past COVID, the pent-up demand for in-person game purchasing and gaming activities will break loose. (IMHO, that is...Video gaming itself is obviously through the roof with COVID, but not "in-person" gaming or buying).
Also, it's not just video-specific gaming out there... There's Dungeons and Dragon's stuff, Magic the Gathering, and other role-playing games. My oldest son does a LOT of RPG stuff..my younger son JUST bought a Nintendo Switch with his own hard-earned money so he can play with his friends, both in small (bubbled) groups and online.
GME is also focusing on collectibles, peripherals, and other PC stuff...So, as I understand GME's plan, it won't continue as just being about ordering stuff (like from Amazon). It's the "gaming experience" they're after. (I'm a little dumbfounded that e-sports is being proposed as an Olympic sport, btw!)
I enjoy the discussion and hearing myself present GME's "story" as a stock. I'll check in later down the road. Thx!

 

[OldShooter]

I was reading some news and saw some blurb about Gamestop's large cash position.

Evidently they have $1.4B in cash with a current market cap of $1.2B and they are cash flow positive. They also pay some 13% dividend or something crazy.

Anyone have any insight here?

From Rick Ferri's "All About Asset Allocation": "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "

 

[Running_Man]

From Rick Ferri's "All About Asset Allocation": "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "

Gamestop is up 200% since this post! The interesting thing is there is no limit to the losses the shorts can have to endure in their quest to watch Gamestop drop from 20 to 10. A 100 million dollar short now has 600 million trying to win that 50 million.

 

[MRG]

Gamestop is up 200% since this post! The interesting thing is there is no limit to the losses the shorts can have to endure in their quest to watch Gamestop drop from 20 to 10. A 100 million dollar short now has 600 million trying to win that 50 million.

+1

I know I was too chicken to get in at $60, then $90. After hours it's $220.

They already have the next target lined up, I'm going to play.

 

[Aerides]

yeah...it's nothing to do with actual Gamestop lol... or the other targets. It's about where the hedge funds have shorts to manipulate.

some tempting plays but a lot of money is gonna get lost in these wild rides.

Here's a thread explaining a bit of what's going on.

https://twitter.com/x/status/1354166397874671616

"it is an unorganized, yet collective effort of memelords & avg Americans to completely ignore all market fundamentals &, thru the power of social media, bankrupt hedge funds overnight, taking their funds. Legality unclear."

 

[dadu007]

I got out today. (In at $18/share). Sold half at $90/share in the morning...then bailed on the rest at $124 mid-afternoon. I'll just say I made enough to pay for 4 years of college for my child.
And then Elon Musk tweeted.
My stomach couldn't take it in the end. Know your risk tolerance, right? Plus, there is obviously a lot of shenanigans going on from the large shorting institutions...8 or 9 halts yesterday for no good reason...dirty stuff...and too much light is shining on GME now, so much so that I think the big boys will twist some arms to reign in the option trading newbie companies like Robinhood.
In the end I didn't want to be so long that I would sit there and watch it drop like a rock into the abyss and miss out on ANY gains. Plus, the attention it required! I can't live like that too long.
For the first time in my life I think I have to pay estimated taxes in the first quarter (This was in my taxable account. Doh!)
Yep, first world problems.
Also, I agree the price is now totally disconnected from any revenue plans the company has. Now it's about retail investors against the hedge funds (who shorted a stock 140%, which should be illegal, if it's not already). A few WSB MPD EDIT] people noticed this and slowly built followers for buying the stock while the hedge funds weren't paying attention and were going about their greedy business as usual. I wonder who will star in the movie?

 

[jazz4cash]

It’s chaos. Very dangerous.

 

[ExFlyBoy5]

This has been fascinating; collective madness if you will. The Reddit folks have some interesting things to say and up until yesterday, many of them brought up good points. Now, there are a lot of "extras" in the forum and you can see that there are some disrupters that are trying to "spoil" the fun. As one of the more prolific posters said, "THIS is how you occupy Wall Street"

I think there is a lot of group think, but I don't think they are wrong in many instances. For example, CNBC reported early on this AM that Melvin (the hedge fund shorting GME) had liquidated all of their short position in GME, but the Reddit folks immediately called BS since there wasn't any trading volume to suggest this...so there is ZERO trust in the corporate news stations.

Personally, I think the younger folks aren't stupid and I made a risky move and put some $ on GME a few days ago. I closed it out today since I think the cat is out of the bag. The gains I realized from this bet will cover our fixed expenses for several months. Crazy. Amazing. Signs of the times.

Edit: The cat is REALLY out of the bag. The Reddit forum has crashed.

 

[ERObjd]

140% short position against gamestop, which means in some way there is naked shorting going on. Naked shorting is supposed to be illegal. Looks like some gamers said NO and banded together and took the Wall street big boys to the woodshed.