Gaming the System: How GameStop Stock Surged 1,500% In Nine Months (arstechnica.com)
(Tuesday January 19, 2021 @10:30PM (BeauHD)
from the behind-the-scenes dept.)
- Reference: 0141277674
- News link: https://slashdot.org/story/21/01/19/2320255/gaming-the-system-how-gamestop-stock-surged-1500-in-nine-months
- Source link: https://arstechnica.com/gaming/2021/01/gaming-the-system-how-gamestop-stock-surged-1500-in-nine-months/
An anonymous reader quotes a report from Ars Technica:
> Nine months ago, GameStop stock bottomed out at $2.80 a share, a reflection of the myriad problems facing the retailer specifically and brick-and-mortar game retail as a whole. As of Tuesday morning, though, [1]that stock price is hovering around $40 a share (peaking at $44.74 as of this writing), with the vast majority of those gains coming in the last couple of weeks.
>
> Is GameStop really worth up to 16 times as much as it was back in April? Is the company's ambitious turnaround plan finally (and suddenly) turning things around? Is GameStop roaring its way back to the nearly $10 billion market cap it enjoyed at the height of the Wii phenomenon? Probably not. Analysts suggest the recent surge in GameStop's stock price is the result of a massive short squeeze bubble that will pop eventually. But beyond the sky-high valuations of recent weeks, analysts also suggest there's some reason to believe GameStop's long-term health is more robust than last year's stock doldrums suggest.
Investor Ryan Cohen, best known as the founder of pet food superstore Chewy.com, bought in to a roughly 10 percent ownership stake in the retailer back in August. "Since August, Cohen has bought even more GameStop shares, and he and two former Chewy executives have been named to the company's board of directors," reports Ars. "That gives Cohen, along with fellow activist investors from Hestia, the potential capability to steer the company in a new direction."
"There's nothing wrong with GameStop," says Wedbush Morgan analyst Michael Pachter, who has a target price of $16 for GameStop stock. "I'm absolutely convinced they're going to thrive and survive. They don't have net debt, so they're not going bankrupt or anything. And with the new console launch, they're probably going to sell a lot of consoles and be fine." As long as there's demand for new and used physical games, there will be demand for GameStop, suggests Pachter.
[1] https://arstechnica.com/gaming/2021/01/gaming-the-system-how-gamestop-stock-surged-1500-in-nine-months/
> Nine months ago, GameStop stock bottomed out at $2.80 a share, a reflection of the myriad problems facing the retailer specifically and brick-and-mortar game retail as a whole. As of Tuesday morning, though, [1]that stock price is hovering around $40 a share (peaking at $44.74 as of this writing), with the vast majority of those gains coming in the last couple of weeks.
>
> Is GameStop really worth up to 16 times as much as it was back in April? Is the company's ambitious turnaround plan finally (and suddenly) turning things around? Is GameStop roaring its way back to the nearly $10 billion market cap it enjoyed at the height of the Wii phenomenon? Probably not. Analysts suggest the recent surge in GameStop's stock price is the result of a massive short squeeze bubble that will pop eventually. But beyond the sky-high valuations of recent weeks, analysts also suggest there's some reason to believe GameStop's long-term health is more robust than last year's stock doldrums suggest.
Investor Ryan Cohen, best known as the founder of pet food superstore Chewy.com, bought in to a roughly 10 percent ownership stake in the retailer back in August. "Since August, Cohen has bought even more GameStop shares, and he and two former Chewy executives have been named to the company's board of directors," reports Ars. "That gives Cohen, along with fellow activist investors from Hestia, the potential capability to steer the company in a new direction."
"There's nothing wrong with GameStop," says Wedbush Morgan analyst Michael Pachter, who has a target price of $16 for GameStop stock. "I'm absolutely convinced they're going to thrive and survive. They don't have net debt, so they're not going bankrupt or anything. And with the new console launch, they're probably going to sell a lot of consoles and be fine." As long as there's demand for new and used physical games, there will be demand for GameStop, suggests Pachter.
[1] https://arstechnica.com/gaming/2021/01/gaming-the-system-how-gamestop-stock-surged-1500-in-nine-months/
They'd have to change a lot (Score:2)
by MtHuurne ( 602934 )
Record shops are doing OK, but instead of shifting large numbers of units they're now specialty shops with knowledgeable staff. Judging by how poorly GameStop treated their staff during the start of the pandemic, I don't think they can expect much loyalty from their staff or their customers.
To survive in the coming years, they have to attract the superfans, collectors etc. instead of people who are stuck without decent broadband, because their number is only going to decline. That's quite the transition to
I heard (Score:2)
Somebody read in Forbes, "Video game sales are rocketing up to new heights",
But then! "Cyberpunk 2077 - Star AAA game developer falls flat on its face",
Hmm... where can I invest in "Games" but not one game?
G a m e s t o p
NTDOY (Score:2)
The other option is to buy NTDOY, which is both a publisher of games with consistent quality and a manufacturer of game consoles. Its closest competitors are Sony (SNE) and Microsoft (MSFT), both of which are heavily diluted with non-video-game lines of business, and Valve, which is privately held.