4 ms·

That's not the point. This is a purely technical play, fundamental valuation methods have been thrown out the window a long time ago. Game stop is maybe worth 5

That's not the point. This is a purely technical play, fundamental valuation methods have been thrown out the window a long time ago. Game stop is maybe worth 5-40$, but these reddit WSBers think the stock will keep rising due to the short squeeze, beyond 1000$ even. Just grab some popcorn and watch the show.

Domenic_S 6y ago
> Game stop is maybe worth 5-40$ What fundamentals make you think that? That's substantially discounted vs revenue.
- 0000011111 6y ago
  Its worth what people will pay for it. This time last year that was ~$4 per share. The company is looses money to firms like AMZ. And then WallStreet bets came in and pumped it up. It's been really fun to watch.
- pivoter 6y ago
  you don't seem to understand what's going on. gamestop itself is just stuck in the middle of a battle created because of financial investment tools. It doesn't really matter which company it is, it just matters that the company is shorted at >100% of total issued shares. if the gamestop is still shorted at 130-150% of total issued shares (finra report coming soon) that means the shorters are going to be paying interest and getting margin called as GME prices goes up. the fees for borrowing GME to short have been 30-60%. That is absolutely insane, if you can even find shares to short, which I haven't seen any for the past day.
  - Domenic_S 6y ago
    I understand very much what’s going on, I wasn’t asking why it isn’t worth today’s price, I was asking why it’s worth $5-$40. GameStop did 6 billion in revenue 2020. At $5 per share that’s a ~348mm valuation.
    - cameldrv 6y ago
      Yes, but revenue peaked in 2017 and has been essentially declining since. They've been losing money since 2018, and their business is in terminal decline due to digital sales. They have about 300 million in net assets depending on what you count. The value of a business with the same revenue as Gamestop, but with a normal profit margin and a stable or growing market is a very different beast. The only way Gamestop has any value is either to keep cutting the unprofitable stores until they just disappear as a company, like Sears did, or leverage the brand to pivot to digital. This is fairly difficult since the consoles are all locked to the console manufacturer's store, and Steam is already dominant on the PC.
    - prewett 6y ago
      Revenue != profit. That $6.5 billion in revenue cost them just over $6.5 billion, so net they lost a little bit of money in 2020. The three years prior, net profit was between 0.3 cents/share and 0.5 cents/share. Additionally, revenue decreased from about $8.5 billion last year. So if the past four years are representative of future prospects, the value of GME's business is $0. But the assets - liabilities (book value) is about $5/sh.
- chillacy 6y ago
  It's probably a little undervalued at $5 a share if you strongly believe that Ryan Cohen and his buddies from Chewy can turn the company around into a digital first company, then project big future revenue growth. Whether it actually works or just ends up like Yahoo is yet to be seen.

Domenic_S 6y ago

> Game stop is maybe worth 5-40$ What fundamentals make you think that? That's substantially discounted vs revenue.

0000011111 6y ago
Its worth what people will pay for it. This time last year that was ~$4 per share. The company is looses money to firms like AMZ. And then WallStreet bets came in and pumped it up. It's been really fun to watch.
pivoter 6y ago
you don't seem to understand what's going on. gamestop itself is just stuck in the middle of a battle created because of financial investment tools. It doesn't really matter which company it is, it just matters that the company is shorted at >100% of total issued shares. if the gamestop is still shorted at 130-150% of total issued shares (finra report coming soon) that means the shorters are going to be paying interest and getting margin called as GME prices goes up. the fees for borrowing GME to short have been 30-60%. That is absolutely insane, if you can even find shares to short, which I haven't seen any for the past day.
- Domenic_S 6y ago
  I understand very much what’s going on, I wasn’t asking why it isn’t worth today’s price, I was asking why it’s worth $5-$40. GameStop did 6 billion in revenue 2020. At $5 per share that’s a ~348mm valuation.
  - cameldrv 6y ago
    Yes, but revenue peaked in 2017 and has been essentially declining since. They've been losing money since 2018, and their business is in terminal decline due to digital sales. They have about 300 million in net assets depending on what you count. The value of a business with the same revenue as Gamestop, but with a normal profit margin and a stable or growing market is a very different beast. The only way Gamestop has any value is either to keep cutting the unprofitable stores until they just disappear as a company, like Sears did, or leverage the brand to pivot to digital. This is fairly difficult since the consoles are all locked to the console manufacturer's store, and Steam is already dominant on the PC.
  - prewett 6y ago
    Revenue != profit. That $6.5 billion in revenue cost them just over $6.5 billion, so net they lost a little bit of money in 2020. The three years prior, net profit was between 0.3 cents/share and 0.5 cents/share. Additionally, revenue decreased from about $8.5 billion last year. So if the past four years are representative of future prospects, the value of GME's business is $0. But the assets - liabilities (book value) is about $5/sh.
chillacy 6y ago
It's probably a little undervalued at $5 a share if you strongly believe that Ryan Cohen and his buddies from Chewy can turn the company around into a digital first company, then project big future revenue growth. Whether it actually works or just ends up like Yahoo is yet to be seen.