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I was wondering if GameStop would use their once in a lifetime overpriced valuation to raise money to invest in a game streaming platform (ie Netflix for games)
by pratik661 6y ago
I was wondering if GameStop would use their once in a lifetime overpriced valuation to raise money to invest in a game streaming platform (ie Netflix for games).
- volgar1x 6y agoIsn't current market already saturated and kind of underperforming commercially ?
- deleted 6y ago[deleted]
- dogshoes 6y agoThey do (or did) own Spawn Labs, which was a cloud streaming device for game consoles around 2010-2014. It no longer exists, but they likely still retain IP in this realm.
- tachyonbeam 6y agoIt seems to me all the streaming gaming services so far have been a flop. In order for it to work, we need really high bandwidth, reliable internet connections and low latency. The technology maybe isn't quite ready still, because we haven't really been focused on the reliability of internet connections and wifi, just more peak download speed. Streaming gaming sounds sexy, but IMO, it's probably bound to keep being a flop for the next 5-10 years. Not something I would invest in.
- Wheaties466 6y agoI am stadia subscriber and I can say that I have fallen in love with the platform. I used to play games more often and don't own a gaming PC or console, nor did I want to purchase one. Performance has been stellar thus far.
- deleted 6y ago[deleted]
- Hamuko 6y agoI played through Cyberpunk 2077 on Stadia and I'm lukewarm about it. On the other hand it's a good way to experience new games without the hardware (I played on a seven-year-old Hackintosh), but on the other hand, it's not a great gaming experience. Visual quality has issues and there is always some input lag even on a good connection.
- Justsignedup 6y agoYeah even if they pivot to be a completely different business model, no massive influx of cash is a bad massive influx of cash. Many companies would kill to suddenly go from death spiral to multi billion dollar.
- LargeWu 6y agoUnless they are issuing new stock, or selling stock that they hold, I don't really see how its valuation helps the company. Likely it's very good for their execs, though...
- ceejayoz 6y agoThey can, in theory, borrow against the current value of the company. I'm not sure many banks are gonna want to trust that valuation, though.
- EGreg 6y agoUmm they issue more stock and sell it into the market of millions of “degenerates” who want to hold it? SEC would need to approve their offering quickly.
- deleted 6y ago[deleted]
- crazygringo 6y agoYes it would absolutely be issuing new stock. However I'm actually not sure how quickly companies can do that. It has to be done by the board. Can they just hold an emergency meeting and authorize it within hours? Or is it the kind of thing that requires certain approvals which require weeks or months? It could also be a huge PR backfire. If the stock then drops back down, then they could be accused of taking advantage of naive redditors -- not that that's necessarily true, but there's definitely risk of it. I mean, is that what a "responsible" public company is supposed to do?
- hervature 6y agoYou should read Matt Levine, he covers all these questions in depth. The answer to your question is that the board can hold the meeting on Twitter and pass the issuance of new shares that way if they wish. The problem is shareholders suing for securities fraud. That the people who bought at the top are now shareholders. The company has a fiduciary duty to them. If they issue new shares and sell them, that lowers the price. Even if everyone agrees that the price doesn't make sense and issuing new shares is actually good for the company (the price will drop less), the company actively did something the shareholders probably weren't giving fair warning about.
- joekrill 6y agoClearly not everyone thinks that's the state of affairs. Roaring Kitty has clearly done quite a bit of research and thinks GME is undervalued. And if you believe that many of the folks on /r/wallstreetbets are being genuine, then they feel similarly. Time will tell. But there's certainly no guarantee that this is a "once in a lifetime overpriced valuation".
- iso1631 6y agoCommon sense puts it at $20 Optimistic might be $90
- hervature 6y agoA retail company, who hasn't made money in 5 years, hit hard by a pandemic. Gaming consoles going entirely digital. "Common sense" here is not well defined when most of the valuation is because Michael Burry bought into the stock and Ryan Cohen joining the team.
- pvitz 6y agoThey have been raising money with an ATM offering since December (https://www.sec.gov/Archives/edgar/data/1326380/000119312520312805/d67321d424b5.htm https://www.sec.gov/Archives/edgar/data/1326380/000119312520...). However, it is not clear when packets of stock were offered, i.e. it could have been already before the high price. AMC on the other hand did take the opportunity of the high price to do an ATM offer IIRC.
- crispyambulance 6y agoGameStop had YEARS to adapt themselves to the new gaming situation, but they instead chose to go the way of the strip-mall and follow the example of BlockBuster Video. When did Steam get started? The middle-naughts? That was the time for GameStop to act. It's too late now. Even if they have the money, do they have the leadership to pull this off? Maybe they'll try, but it will be an uphill fight, even with the Chewy founder on the board. I expect the execs will find some way to parachute out and that there will be no transformation of GameStop.
- sjg007 6y agoThere's still a way with video game streaming.
- crispyambulance 6y agoI agree there is, for small, niche players who are more flexible and adaptive to their market than, say, Steam. Can a brick-and-mortar dinosaur (with a lot of temporary money) just buy their way into being a Steam competitor? I doubt it.
- me_me_me 6y agoSo they are going to compete with Stadia? Google Stadia? Actually Stadia will be dead in a year, judging by what has happened with it. Still, what does gamestop have in terms of software? A webdev team? Creating a games streaming platform is an enormous project.
- sjg007 6y agoSomething like that eventually.
- lolsal 6y agoThere is plenty of room to compete or innovate. GameStop might be getting a second chance, which is rare.
- 6y ago
- tuxinator 6y agoI don't think streaming games will ever be a viable business. Maybe for slow turn based games it works fine, but anything time/frame rate sensitive is a no-go. I just can't see it ever going beyond novelty.
- Dirlewanger 6y ago> to invest in a game streaming platform (ie Netflix for games) Like what, OnLive, which is dead? And Stadia, which is a massive failure which Google will shutter in the coming years?
- Octopodes 6y agoGamestop used to own Kongregate (a mostly-Flash) online gaming site years ago, but they sold it off.