Is GameStop’s Big Growth Investment Good News for Shareholders? The Motley Fool
“Reddit is like the definition of confirmation bias,” Matt Kimbro, from PR company NowADays Media, told me. And far from being a failing, bricks-and-mortar gaming company, it is well placed to move into the digital space, where even a small part of the market would make it hugely valuable. And that spike was widely thought to have been a one-off – hedge funds would never again allow themselves to be blindsided. “In recent years elevated crowding, low turnover, and high concentration have been consistent patterns, boosting the risk that one fund’s unwind could snowball through the market,” Kostin wrote. The GameStop frenzy may have quieted down, but according to Goldman Sachs, the retail trading boom could happen again soon.
Fortune reported earlier this week that the GameStop short squeeze was one factor dragging down the overall market. “Some suggest it’s possible that the profit-taking in large-cap indexes is in part to raise money to cover short bets made on stocks like GameStop. The article went on to state that investors who were short GameStop are currently down over $23 billion year to date in 2021, according to S3 Partners data. The ad tech firm currently trades for a roughly $100 million market capitalization, valuing its shares at about 0.3X price-to-sales (P/S). That’s the same as GameStop’s valuation immediately before its short squeeze and about eight times lower than the average U.S. firm. In other words, it’s a siren’s call for deep-value investors looking for enormous returns.
Shares in Robinhood Markets (HOOD, $14.40), whose free app became ground zero for meme-stock trading volume, have slumped almost 20%. The Roundhill Meme ETF (MEME, $11.93) is off 15% for the year-to-date. GameStop earlier this week also announced the launch of its digital wallet for holding non-fungible tokens (NFTs) and cryptocurrency, as part of its plan to transform into a much more digitally driven company.
Troika Media: Reddit’s Next GameStop?
“The way the platform works is the content gets served to you based on how many upvotes it has. Unless it can sell a lot of lidar systems in the near future, MicroVision will probably have to sell more stock. Nevertheless, Lottery.com’s potential lies in the fact that gambling is popular. As well, with speculation nowadays being the only way to get ahead due to ho-hum activtrades review rises in wages, the activity may remain so. If any name could be the next GameStop, it could be Workhorse, the electric vehicle (EV) manufacturer that everyone seemingly thought was a shoo-in for the U.S. Since Workhorse was the only all-electric solution in the bidding, many if not most analysts reasoned that it had the highest probability of securing the deal.
- Last year’s meme stock trading frenzy might have come to an abrupt end in 2022, but the market remains rife with high-short-interest stocks that could be ripe for a short squeeze.
- Since Workhorse was the only all-electric solution in the bidding, many if not most analysts reasoned that it had the highest probability of securing the deal.
- For a brief moment, it seemed as if GameStop could relive its glory days of growth… whether in Web3 gaming or non-fungible tokens (NFTs).
- Then again, the same could be said about the very hedge funds the social media crowd targeted.
- A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies.
The company also announces its March quarter results after the close today. Plus, it might not hurt that MARA features a short percent of float of 20.4% (though its short ratio of 1.7 is quite low). With the year that cryptocurrencies had in 2021, it was perhaps only inevitable that the sector would incur a serious correction. As I sit here writing this, over the trailing week, several major cryptos have printed red ink to the magnitude of 15% or greater. That would place us near the cusp of what analysts usually consider bear market territory. Given that the meme-stock movement may have already shifted from their initially well-intentioned philosophy to pure greed, I would not be surprised if CXW stock swings dramatically higher this year.
They’re ways that investors can make a big profit with relatively small payments up front, if the stock moves in the right way. Many of the traders pushing up GameStop are smaller-pocketed or novice investors. Troika’s forward EV/EBITDA ratio sits at 3.1X, a figure usually only seen in private-market transactions. (To be fair, I also gave a 40% chance that Troika “runs off with all our money” and would be worth zero). The demand raised its share price massively, which nobody saw coming, and everyone who had banked on it dropping in value had to buy their shares back.
Jan. 26, 2021: ‘GameStonk’ gets celeb backing from Elon Musk
Over the years, the entity would purchase everything from broadband companies to brand consultancies. It wasn’t particularly successful; the firm averaged a $9.4 kvb forex million loss per year and required a steady stream of stock and debt issuances to fill the gap. And for those wondering, yes, GameStop is a Fortune 500 company.
“We are excited to bring our customer-obsessed mindset and technology experience to GameStop and its strategic assets,” Cohen said in a statement at the time. Still, prtrend the company reported an operating loss of $63 million in the third quarter. GameStop shares plunged nearly 20% the next day, closing on Dec. 9 at $13.66 a share.
The now-legendary r/wallstreetbets page was started in 2012, according to a Wall Street Journal interview with one of the founders. The result is something of a shakeup in the list of stocks with highest short interest, as measured by the percentage of shares outstanding sold short. Although a number of meme stocks remain, many have been replaced by more traditional short bets.
Reddit Stocks: Corsair Gaming (CRSR)
“They seem hell-bent on taking on Wall Street, they seem to hate hedge funds and threads are peppered with insults about ‘boomer’ money. If you’re sure the company will lose value, you’d make a profit when you buy them back and the price has fallen. You’ve probably stared blankly at your WhatsApp chat as the words “GameStop”, “Reddit” and “stock market” get thrown around the way “pub” and “meet at 8” used to. “This has captured the attention of America and every trader and non-trader alike,” Left said. He added that he respects the market and has “respect for the people on the Wall Street Bets and on Reddit message boards.” Left of Citron Research made the announcement in a YouTube video, saying Citron Capital let go of the majority of their bets that GameStop stock would fall and took a “100%” loss in doing so.
In February, the prevailing attitude on Wall Street was the share price was slowly finding its natural position. GameStop’s shares slumped by 40% in 25 minutes on Wednesday, after a few days of frenetic growth. Nevertheless, WBX stock still has risk factors working against it.
The stock market drama has been called a “David and Goliath” battle. Wall Street sometimes refers to these kinds of investors as “dumb money”. But on Wednesday, the share price was approaching its January high. Get a brief on the top business stories of the week, plus CEO interviews, market updates, tech and money news that matters to you. MicroVision has seemingly not generated any significant revenue as can be seen in the numbers below. Only two analysts follow the stock and only one of them has a published number for 2022 revenue, per Yahoo! Finance.
Using 2019’s revenue to remove any Covid-19 impact and the current market cap of $3.1 billion, the company’s market cap to revenue ratio is 1,077x. Rising interest rates amid expectations for tighter monetary policy have hit growth stocks as a whole in 2022. But it has really clamped down on pricey high-short-interest meme stocks from last year. The stock hasn’t moved higher this week until today, so perhaps the new wallet offering is catching investor interest, although it’s likely more related to the buzz about short interest and the cost to borrow shares.