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posted by martyb on Thursday March 25 2021, @01:29PM   Printer-friendly
from the flame-in-your-heart dept.

GameStop (the stock) and GameStop (the retailer) continue to be worlds apart:

The last time GameStop announced its quarterly earnings, in early December, the stock market valued the video game retailer at about $1 billion. Following a worse-than-expected earnings report released Tuesday night, the company now has a market cap of just under $10 billion as of Wednesday morning.

Sure, that's down roughly 18 percent from Tuesday's closing price, and off roughly 44 percent from a January peak that saw the stock offering become a poster child for the retail investor-driven "meme stock" phenomenon. Still there's not much in this week's report to suggest that GameStop as a company is worth ten times as much as it was just three months ago, much less the higher valuations it briefly enjoyed in the interim.

[...] Overall, GameStop's latest earnings report shows a company still struggling to turn itself around. For the full fiscal year, the company lost $215 million on net, improving on a net loss of just over $470 million the year prior. Net sales for the year were down over 21 percent, to $5.09 billion, a decline GameStop blamed in part on its "de-densification efforts" (i.e. closing nearly 700 stores). Even taking that move into account, though, sales for comparable stores were down 9.5 percent for the year.

Previously:
GameStop Shares Rise, Fall and Rise Again in Roller-Coaster Day of Trading
The Complete Moron's Guide to GameStop's Stock Roller Coaster
Console Options Without Disc Drives Could be GameStop's Final Death Knell
GameStop Heading Towards Possible Doom
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet


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  • (Score: 5, Interesting) by isostatic on Thursday March 25 2021, @03:30PM (7 children)

    by isostatic (365) on Thursday March 25 2021, @03:30PM (#1128808) Journal

    Depends who wants to buy it, but a lot of people value GME because of the possibility of a squeeze of the shorts.

    I'm not qualified to know if there's anything in the whole 'sort squeeze' conspiracy. In many ways it sounds like a harmless (to those who don't believe and have dumped their life savings in at $300/share) version of QAnon.

    If the theory is right, and Gamestop releases new shares, that would allow the short sellers to buy them to cover for a lot lower than they would than the theory goes.

    Of course it would also increase the cash holdings of the company, which would increase the value of the company.

    Personally I bought a couple of shares from my beer money, so if it does go APE-EMOJI To the MOON-EMOJI on ROCKET-EMOJI with DIAMOND-HANDS-EMOJI I've got tickets, and a legitimate claim to say "I was involved" in beer conversations. It's a hedge against the "I should have bought" feelings I get with bitcoin.

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  • (Score: 0) by Anonymous Coward on Thursday March 25 2021, @04:03PM (2 children)

    by Anonymous Coward on Thursday March 25 2021, @04:03PM (#1128823)

    and Gamestop releases new shares, that would allow the short sellers to buy them to cover for a lot lower than they would than the theory goes.

    Why should Gamestop sell them for a lot lower?

    • (Score: 2, Informative) by isostatic on Thursday March 25 2021, @07:41PM (1 child)

      by isostatic (365) on Thursday March 25 2021, @07:41PM (#1128941) Journal

      Supply and demand.

      If two hedge funds need 40m shares each and there’s only 70m available, they have to outbid each other and stick an go for 10k a share, costing the hedge funds 400b each (or continue to increase until they go bust)

      If GameStop release 70m new shares at minimum 1k a share then hedge funds cover for 80b, or probably less because retail would sell at 950

      The idea I think is that retail will corner the market and drain the hedge funds dry.

      I do hope that happens, like the majority of the world I have no time for billionaire hedge funds

      I can’t see them not being bailed out in some fashion by governemt even if the theories about them not having covered their shorts are true, but it’s better odds that the lottery, and the excitement lasts longer than a horse race.

      • (Score: 0) by Anonymous Coward on Friday March 26 2021, @02:05PM

        by Anonymous Coward on Friday March 26 2021, @02:05PM (#1129345)

        Why are you even modded up. Gamestop holds existing shares. It doesn't have to release new shares. And it certainly doesn't have to release 70m new shares to make a lot of money.

  • (Score: 2) by FatPhil on Thursday March 25 2021, @04:21PM

    by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Thursday March 25 2021, @04:21PM (#1128835) Homepage
    Thank you for the emoji-laden glimpse into your future beer conversation!
    --
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  • (Score: 3, Funny) by istartedi on Thursday March 25 2021, @04:59PM

    by istartedi (123) on Thursday March 25 2021, @04:59PM (#1128855) Journal

    If you were, you'd have used multiple ROCKET-EMOJI. At least 3. It's the only way to make sure it goes up.

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  • (Score: 2) by legont on Thursday March 25 2021, @11:53PM

    by legont (4179) on Thursday March 25 2021, @11:53PM (#1129087)

    Instead of selling stocks, they could buy some other better company. They could also issue debt at attractive prices. These are two most common ways to capitalize on high valuations.

    --
    "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
  • (Score: 2) by Revek on Friday March 26 2021, @12:31AM

    by Revek (5022) on Friday March 26 2021, @12:31AM (#1129104)

    I bought two measly shares at 52. If it happens like the apes predict the short sellers will have to close their positions, eventually. These guys keep buying more and more of it. Me, I'm gonna ride it down in flames with my two shares. I will probably hold longer than I should. I may have already done that. I read today Michael Jordan is down 500 mill and the hedges that took a bath are to blame. They clipped these hedge fund weenies mid scam and its funny to read both sides of it. Hardly ever has there been a wider gap in the story each side is pushing.

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