![]() ![]() (AMC) have soared nearly 65% so far in 2023, and AMC But many of the Reddit/WallStreetBets darlings of two years ago were particularly strong performers. Sure, the entire market did well in January. The post Why GameStop Stock Is Not Unsinkable appeared first on InvestorPlace.Meme stock mania was supposed to be over, right? Guess what: It’s not. It doesn’t matter if you have $500 in savings or $5 million. ![]() Stock Prodigy Who Found NIO at $2… Says Buy THISĮarly Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air” $200 Oil Sooner Than You Think – Buy This Now The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. With many stocks now on sale, focusing on long-term opportunities appears more ideal than rolling the dice on GME stock. By the time its NFT marketplace and wallet service launch, NFTs could have by then gone the way of the pet rock. Its transition into primarily an e-commerce company appears fully priced-in. That is, beyond the questionable chances of the “mother of all short-squeezes,” playing out. Not only that, it’s still hard to see the upside. Perhaps pretty soon, if its squeeze and split appeal fades. Yet while this may underscore the risk of shorting this stock, going long is a risky move too.Įxcitement about it could again turn on a dime. Instead of a lackluster earnings report pushing it lower, shares are up in spite of poor operating performance. Bottom Line: Be Careful Chasing GameStopĪdmittedly, ahead of earnings, I made the wrong call on GameStop. In turn, resulting in shares resuming their slide lower, as fundamentals come back into focus. This latest round of “meme stock madness” for GameStop could fade. Enthusiasm for this catalyst may peak, assuming management officially announces a split date. Shareholders approved the split at the June 2 shareholder meeting. Second, traders could have also piled into the stock ahead of its planned stock split. The fact that the recently overzealous short-side has backed off, as seen from the drop in short borrow rates after their early June spike, could also affect its squeeze appeal. ![]() How so? Excitement from the long side could cool down, in two ways.įirst, some traders who dived into GME stock again as a squeeze play could decide to take profit. The days of it trading divorced from fundamentals may remain numbered. Still, it may be premature to assume that this unconventional bull case for the stock is re-emerging. If the economy continues to slow down, or perhaps officially enters recession territory, decreased customer demand could leave the video game retailer in the same boat as general retailers like Target (NYSE: TGT).ħ Long-Term Stocks That Never Go Out of Style This could be a risky move at this stage of the economic cycle. The company also loaded up heavily on inventory during the quarter. Revenue for its fiscal first quarter (ending April 30), were up modestly ( up 7.9% year-over-year), but its net loss more than doubled compared to the prior year’s quarter. Again, this came despite what were arguably mixed results. Then, after its June 1 quarterly earnings release, GME stock rallied again. It made its trek back to triple digits in late May, during that month’s relief rally. InvestorPlace - Stock Market News, Stock Advice & Trading Tips GME Stock and its Oddly Resilient Recent Performanceīriefly falling down to double-digit prices during the May market selloff, since then GameStop has climbed back to prices north of $100 per share. However, you may not want to jump to that conclusion. Although not anywhere near their meme stock highs, it could appear that it’s at little risk of falling to a price more in line with its underlying value. With this, you may think shares in the video game retailer are unsinkable. ![]()
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