3 ms·
GME was not undervalued. Its a dying company. They sell physical copies of video games. In the ear of digital content, even worse companies are selling game pa
by me_me_me 6y ago
GME was not undervalued. Its a dying company.
They sell physical copies of video games. In the ear of digital content, even worse companies are selling game passes - ie rent our game catalog for a month. This is literally Blockbuster vs Netflix of video games world.
The hedge funds were trying to prey on Gamestop's dying corpse, and WSB players figured out how to take advantage of it.
I think the reality is the WSB big guys needed to hype up the short squeeze and 'sticking to the man' to cause the boubble. And it worked out great.
That in itself is not bad, but it will become a problem when the main players start to slowly exit, the greedy middle will have (what is it called) stop sells set up in case of fall, and then it will quickly collapse and who will be left with their pants down waking up in the morning to see its all gone?
The "I am holding till zero" crowd.
The idealists are always taken advantage of by the shrewd leaders of any movement.
If you take part, just pay attention to it, and exit or at least take some profit when you start seeing signs of it.
- djbebs 6y agoIt being a dying company doesnt mean it wasnt undervalued. Gamestop was being sold below its Net Current Asset Value, that is, if you took all of its cash in the bank and used it to pay off all of its debts, you would have more cash in hand than if you had not bought gamestop.
- me_me_me 6y agoOh, I see. I stand corrected then.
- tedunangst 6y agoNot unusual for a company expected to lose money. Yeah, sure, I'd pay $90 for a bag of 100 $1 coins, but not if there's a hole in the bag and half are going to spill out before I get home.
- Apocryphon 6y agoDigital content is king, but physical copies are always going to have a market- collectors do want physical boxes for their display shelves. Though certainly the company does need to pivot into something bigger. I'm not sure if the comparison to Blockbuster is as comparable, as renting media probably has different dynamics from buying media. And games, which cannot be rented except in a few specialty subscriber services such as Apple Arcade, will have different dynamics from movies or shows that can be rented.
- Noos 6y agoI think amount of physical games is declining in real terms, though. I actually buy a lot of them, as one of my weaknesses are portable console systems. I've noticed that new releases are much harder to find in general now; Limited Run's entire business model is based on the fact most smaller games are digital first or digital only. Also no, the current decisions for the retail stores make me feel like they will lose a lot of goodwill if they transition. The stores barely keep any stock on hand at all, and are increasingly being emptied of goods. I'm legitimately worried they will shutter them all soon; 3 local gamestops where I live have closed in a year or two.
- Apocryphon 6y agoI've actually seen ideas brought up that they don't necessarily have to (only) transition to digital. They already are planning to transition to selling PC parts at their physical stores; I've seen people suggest they also sell physical board games as well, which has had somewhat of a renaissance this past decade. I've definitely seen the remaining big box bookstores (pretty much Barnes and Noble at this point) move out of their core content in a similar fashion. GameStop could also take advantage of physicality and become community spaces for eSports events or even tabletop gaming, collectible card game tournaments, etc. Basically become general "geek" stores and not just gamer stores.