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GameStop $GME is a video game, consumer electronics and gaming merchandise retailer
It was founded 37 years ago and now operates over 5,000 stores throughout North America, Australia, New Zealand and Europe
It was founded 37 years ago and now operates over 5,000 stores throughout North America, Australia, New Zealand and Europe
The company grew at a rapid pace over the 2005 - 2010 period as it acquired competing retailers and expanded internationally
âTimes are good, with double digit growth expected for sales of games this calendar year as well as for the hardware [...]â
https://edition.cnn.com/2008/TECH/04/02/gamestop/
âTimes are good, with double digit growth expected for sales of games this calendar year as well as for the hardware [...]â
https://edition.cnn.com/2008/TECH/04/02/gamestop/
In 2010, J. Paul Raines became CEO and started to boost digital sales, which grew from $ 190m in 2011 to $ 600m in 2012
The company booked sales of $ 9.5B in 2012 and projected digital sales of $ 1.4B by 2014 https://www.dmagazine.com/publications/d-ceo/2013/january-february/breakfast-with-j-paul-raines-of-gamestop/
The company booked sales of $ 9.5B in 2012 and projected digital sales of $ 1.4B by 2014 https://www.dmagazine.com/publications/d-ceo/2013/january-february/breakfast-with-j-paul-raines-of-gamestop/
Starting from 2016, $GMEâs sales plateaued (revenue stagnated at $ 9B) and started to trend downwardsâsales of new software have been weak as more and more of GameStopâs biggest buyers [...] have begun purchasing games directly from console makersâ https://www.cnbc.com/2016/01/29/with-sales-declining-gamestop-gets-into-game-publishing.html
By 2020, Gamestopâs sales had slumped to $ 6.4B, leading to a loss of $ 470m
âprolonged decline broadly attributed to the rise of online sale and distribution of video gamesâ
âprolonged decline broadly attributed to the rise of online sale and distribution of video gamesâ
New distribution channels also dried-up $GMEâs used-game businessâwhich not only takes sales of new games out of brick-and-mortar stores, it eliminates the circulation of used games, GameStopâs longtime stock-in-trade.â https://www.polygon.com/2019/9/11/20860750/gamestop-layoffs-store-closures-sales-earnings-stock-price-quarterly-report
Well, not all was lost for $GME 
Michael Burry of investment firm Scion Asset Management, disclosed a 3% stake in $GME
Burryâs bet was that the Sony & Microsoft consoles would still work with a disc, and would therefor drive customers to $GME shops https://markets.businessinsider.com/news/stocks/gamestop-stock-price-spikes-big-short-michael-burry-goes-long-2019-8-1028467346
Michael Burry of investment firm Scion Asset Management, disclosed a 3% stake in $GME Burryâs bet was that the Sony & Microsoft consoles would still work with a disc, and would therefor drive customers to $GME shops https://markets.businessinsider.com/news/stocks/gamestop-stock-price-spikes-big-short-michael-burry-goes-long-2019-8-1028467346
$CHWY co-founder also disclosed an investment into $GME and had purchased over $ 76m worth of shares by December
Former Chewy employees also joined Gamestopâs board in an effort to boost the retailerâs e-commerce efforts https://www.reuters.com/article/us-gamestop-ryan-cohen/gamestop-signs-deal-with-investor-refreshes-board-to-focus-on-e-commerce-idUSKBN29G1EP
Former Chewy employees also joined Gamestopâs board in an effort to boost the retailerâs e-commerce efforts https://www.reuters.com/article/us-gamestop-ryan-cohen/gamestop-signs-deal-with-investor-refreshes-board-to-focus-on-e-commerce-idUSKBN29G1EP
On the bear side, hedge funds have lined up their shorts, betting that $GME was overvalued and its turnaround would fail
These bets were derailed by a crowd of investors who bid up $GMEâs shares in an apparent effort to orchestrate a short-squeeze https://www.businessinsider.com/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1
These bets were derailed by a crowd of investors who bid up $GMEâs shares in an apparent effort to orchestrate a short-squeeze https://www.businessinsider.com/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1
The stock rose by over 590% over the December 28th - January 27th period
Forcing short sellers to close their positions and sometimes get external funding to stay afloat https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html
Forcing short sellers to close their positions and sometimes get external funding to stay afloat https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html
How does $GME compare?
At $ 347 a share, $GMEâs PS ratio is of 4.7
$TGT Target scores an EV / Sales of 1
$WMT Walmart scores an EV / Sales of 0.7
$BBY Best Buy scores an EV / Sales of 0.6
$BBBY Bed Bath & Beyond scores an EV / Sales of 0.6
At $ 347 a share, $GMEâs PS ratio is of 4.7 $TGT Target scores an EV / Sales of 1 $WMT Walmart scores an EV / Sales of 0.7 $BBY Best Buy scores an EV / Sales of 0.6 $BBBY Bed Bath & Beyond scores an EV / Sales of 0.6
The companies listed above vary in growth, margins, debt and earnings but provide a directional sense of $GMEâs valuationWhen looking at previous âStock Surgesâ, here is what can we can see
Back in June 2020, Hertz was trading at around $ 0.81 on rumours of bankruptcy
Later in the month, the stock spiked to $ 5.5 for a 590% gain - the stock is now at $ 1.6
This time, so-called âRobinhoodâ traders were pointed at https://markets.businessinsider.com/news/stocks/hertz-stock-insiders-sell-shares-during-rally-fueled-robinhood-bankruptcy-2020-6-1029301733
Later in the month, the stock spiked to $ 5.5 for a 590% gain - the stock is now at $ 1.6 This time, so-called âRobinhoodâ traders were pointed at https://markets.businessinsider.com/news/stocks/hertz-stock-insiders-sell-shares-during-rally-fueled-robinhood-bankruptcy-2020-6-1029301733
Back in August 2018, cannabis stocks saw their valuation boom
$TRLY went from $ 25 a share to $149 - the stock is now at $ 18 https://www.thestreet.com/investing/tilray-rises-as-wall-street-embraces-cannabis-craze-14702569
$TRLY went from $ 25 a share to $149 - the stock is now at $ 18 https://www.thestreet.com/investing/tilray-rises-as-wall-street-embraces-cannabis-craze-14702569
Michael Burry and Chewyâs co-founder most probably saw something the market ignored
Yet, the short squeeze-fuelled rally may prove short-lived https://www.bloomberg.com/news/articles/2021-01-27/michael-burry-calls-gamestop-gain-unnatural-insane-dangerous
Yet, the short squeeze-fuelled rally may prove short-lived https://www.bloomberg.com/news/articles/2021-01-27/michael-burry-calls-gamestop-gain-unnatural-insane-dangerous
