Key points:
– Earnings fall short
– Company “transforms” as investors pray for a better future
– Negative sentiment after having doubts in creating a market for NFT’s
Since it became a social media meme, GameStop (NYSE: GME) company has been a highly volatile stock. However, without any solid foundation in terms of financial fundamentals, the shares survive because of investors who continue to create an advertising bubble on social media.
Since June 2021, the shares have been steadily down. The company reported a net loss of $141M, which translates to a loss of ($1.86) per share—falling well short of Wall Street projections of just ($.85) per share.
The company has a questionable direction and continues to lose value while there are no signs of improvement soon. The company says it is transforming itself into a technology company obsessed with its consumers. Still, nothing happens on the surface.
When they publicly announced their profit/loss, they talked about the metaverse and NFTs as possible solutions.
Wedbush analysts argued the opposite. They were saying that it would have limited success. They also cut their price projection with a target between $45 and $30.
Today after being worth over $300 in the summer of 2021, they are worth just $90. Not only that, but with this cut in projection, investors are eyeing more losses shortly.
The company has not adapted to the new digital world and may disappear just like BlockBuster did a few decades ago.
They may survive, but their options are limited, and their chances run out.
When the rest of the investors wake up to reality, there’s a very high probability that we’ll see GameStop back trading in the single digits as it did between 2019 and 2020.
Be very careful where you invest your money and seek information before investing. Please do not get carried away by social media and their advertising.
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