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>Not growing revenue Not growing revenue would be one thing, they're shedding revenue at pace - 50% decline since 2020. > Shareholders seem to agree First, i
by turtlesdown11 5mo ago
>Not growing revenue
Not growing revenue would be one thing, they're shedding revenue at pace - 50% decline since 2020.
> Shareholders seem to agree
First, it's a meme stock. The market can remain irrational for long periods. Another way to analyze it - almost all of the market cap of ~$10b is the $9b in cash. The shareholder pricing tells you they value the business at it's cash assets.
Gamestop's business of physically selling video games, consoles, etc is a dying/dead industry. Nothing can change the trajectory of the market that is almost completely disappeared.
It's a Blockbuster or Tower Records, a dead business running on fumes and memestock valuation.
- trollbridge 5mo agoA strong cash position business like that is effectively a finance sort of business, in other words, exactly the kind well positioned to go conduct an LBO.
- turtlesdown11 5mo ago> A strong cash position business like that is effectively a finance sort of business You are conflating companies that make a lot of cash (and therefore can afford debt service) to a company that has limited cash flow, but has a large pile of cash. The shareholders would be best served by a special dividend of the cash. Management has shown zero ability to grow a business.
- trollbridge 5mo agoIn this case, the shareholders don't want a special dividend and prefer to own a company that has a strong cash position. There is nothing at all wrong with shareholders choosing that. There are plenty of other stocks to invest in if one wants a highly-leveraged company that is trying to grow really fast.