In the best-case scenario, GameStop could use its elevated share price as an opportunity to raise equity. But that won't necessarily benefit current investors who may face dilution.
Full Answer
Is GameStop a good stock?
When assessing whether GameStop is a good stock to buy, it is crucial to realise that much of the movement in GME stock is not related to the company’s performance. Instead it is a classic "meme stock", its price reacting to surges in viral activities on social media and the like.
Should I Buy GameStop shares?
Should I buy shares of GameStop or any of the other high-flying stocks? The short answer is probably not. GameStop has already gone from a low of under $3 to a share price of $357 as I write this.
Who is buying GameStop stock?
Robinhood angered many retail investors when the company in January 2021 halted buying of shares in GameStop, AMC, and other meme stocks during a massive rally. Robinhood has since pledged to win ...
How to invest in GameStop?
Just follow these five easy steps:
- find a broker
- open your account
- fund the account
- buy the share
- review your position
Did GameStop make money from stock market?
GameStop's stock price enjoyed gains through most of January 2021, but they exploded late in the month and peaked on Jan. 28, reaching a record high of $483. Shares of GameStop started the year at $19.
Is it good to invest in GameStop stock?
Gamestop (GME) stock is likely to decline after the current overheated rally. The stock can still be profitable in the long term if revenue growth stays consistent. But investors should avoid buying GME stock due to the high short-term risk.
Why has GameStop increased stock prices?
On December 30, 2020, the price was valued at 18.84 U.S. dollars per share. The cause of this dramatic increase is a concerted effort via social media to raise the value of the company's stock, intended to negatively affect professional investors planning to 'short sell' GameStop shares.
Is GameStop still profitable?
Consensus from 4 of the American Specialty Retail analysts is that GameStop is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$35m in 2023. So, the company is predicted to breakeven approximately 2 years from today.
When GameStop split?
What Happened With GME Stock. GameStop officially announced plans for a stock split on March 31 of this year. That the stock split vote will officially happen on June 2 has investors excited, and many are buying GME shares ahead of time. GameStop continues to see its share price fluctuate wildly.
Who bought GameStop stock?
Chairman Ryan CohenChairman Ryan Cohen snapped up 100,000 more shares in the meme stock, according to a regulatory filing late Tuesday, taking his holding up to 11.9%. The purchase was made through Cohen's RC Ventures LLC Vehicle and takes his holding up to 9,101,000 shares. “I put my money where my mouth is,” Cohen said via Twitter.
Who made money on GameStop?
One veteran who said he made millions on GameStop was Bill Gross, the retired “bond king” and former star manager at California money management giant Pacific Investment Management Co.
How did hedge funds lose money on GameStop?
Steven Cohen's hedge fund Point72 Asset Management invested new money as Melvin was taking losses last year. Melvin had been betting against GameStop since 2014. It profited as the shift toward downloaded and streaming videogames caused the bricks-and-mortar retailer's stock to drop.
Are hedge funds still shorting GameStop?
On June 22, 2021, White Square Capital, a London-based hedge fund that was reported to have suffered "double-digit" losses betting against GameStop, announced that it would be shutting down.
Is GameStop a good stock to buy 2022?
However, according to financial experts, the insurgence comes as a shock after the 2022 early predictions for this company, as its current stock value far exceeds the company's real worth. Since March 1, GameStop's stock market value has ranged between $78 and $189.
How is GameStop doing financially?
GameStop (ticker: GME) reported a fiscal third-quarter adjusted net loss of $105.4 million, or $1.39 per share. Sales surged 29% year over year to $1.3 billion. The four remaining analysts providing estimates to FactSet forecast an adjusted net loss of 52 cents a share with sales of $1.19 billion.
Is GameStop debt free?
GameStop Corp. announced plans to retire senior notes due in two years, leaving the company virtually debt free. The video-game chain said Tuesday it's redeeming $216.4 million of notes.
Why did Nintendo's 3rd quarter sales fall?
Third-quarter sales fell 30% to $1 billion because of coronavirus-related challenges (such as closed storefronts in Europe) and the transition from generation 8 to generation 9 consoles, which delayed the release of several software titles.
Why do short squeezes happen?
According to The Wall Street Journal, retail investors are coordinating on social media to drive up the prices of heavily shorted stocks to trigger short squeezes -- or a chain reaction of short-sellers attempting to buy back shorted shares to exit their positions, causing the price to soar. Image source: Getty Images.
Is GameStop investing in e-commerce?
GameStop is also investing in its e-commerce sales channel -- a rare bright spot -- which grew 257% to represent nearly 25% of total sales in 2020. The rapidly growing online business suggests the company isn't completely hopeless. But so far, the new opportunity hasn't led to sustainable bottom-line improvements.
Is GameStop broken?
2. GameStop's business model may be broken. GameStop's revenue has declined at a compound annual growth rate (CAGR) of roughly 8% from fiscal 2015 to 2019. And the situation didn't improve in 2020 as the coronavirus pandemic continued to batter the retail industry by limiting consumer mobility.
Shares of the video game retailer are rising to the moon as part of an epic short squeeze
GameStop ( GME -2.70% ) stock is the recipient of an extraordinary amount of attention lately. It is caught up in the middle of a buying frenzy that started on the Reddit forum subgroup r/WallStreetBets. At one point, the price for one share of GameStop stock rose a jaw-dropping 1,063% just in January.
Hardcore gaming enthusiasts are the key
GameStop is a video game retailer with over 5,000 locations in at least 10 countries. Having so many locations is not ideal when there also happens to be a major shift in the video game market to digital purchases underway.
NYSE: GME
However, some of the most enthusiastic gamers (the ones who play so many hours that they get bored of games quickly) would rather have a physical copy. Why? That's because when they are finished playing a game they can sell it, or trade with friends -- an option not available to them with a digital copy.
What this could mean for investors
At the very least, this continued demand means that GameStop will not be made irrelevant anytime soon. This advantage is certainly not enough to grow sales, but it could be enough to buy GameStop management time to pivot its business model.
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