A lot of people like the stock, nonetheless, GameStop Corp’s day-trading retail investors will later today be presented with the retailer’s first set of financials since the Reddit furore gripped the stock market.
Quite how much tangibles like revenues and profitability factor into the investment proposition it is not clear – some ‘boomers’ and hedge fund managers may suggest its very little.
Instead, attentions may instead fall on forward looking statements and a much murmured about new e-commerce strategy.
Indeed, that early reports this morning reveal the departure of chief customer officer and former chief marketing officer Frank Hamlin likely suggest that ‘strategy’ will be among the day’s talking points.
Wall Street expectations
Wall Street analysts are forecasting earnings and revenues for the three months to end-January to be higher than this time last year.
Earnings per share are seen coming in at US$1.46, according to the Street consensus, up 15%, on revenues 2% higher at US$2.2bn.
On the surface, such metrics point in the right direction – but, sufficient to support a 1,000% share price rally in the year to date??
In its recent annual report, GameStop painted a gloomy picture for the future of bricks-and-mortar games retailing.
It “may take significant time and resources” to respond to the moving of games purchases through digital channels, it said previously.
A new start or grist for the meme mill?
Over on Reddit the day-traders of r/WallStreetBets don’t appear to care too much about the financial fundamentals, or the projections for bricks-n-mortar retail.
Maybe it really is just about the trolling, and the perceived battle of ‘good vs evil; a plucky crowd of small retail investors against the ‘elite’ short-selling hedge funds.
That said, Keith Gill – otherwise known by online personas ‘DFV’, ‘DeepF***ingValue’, or ‘Roaring Kitty’ – in a February testimony to the US House of Representatives’ Committee on Financial Services said: “GameStop’s stock price may have gotten a bit ahead of itself last month, but I’m as bullish as I’ve ever been on a potential turnaround.”
He added: “I believed – and I continue to believe – that GameStop has the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry.”
Gill began investing in GameStop back in 2019 and is credited as being among a figurehead group of users that drove the investment pitch on r/wallstreetbets to go viral.
Internally, meanwhile, GameStop recruited investor Ryan Cohen to join a strategic-planning committee to “identify initiatives that can further accelerate the company’s transformation”.
Cohen, the co-founder of online pet products retailer Chewy, has been known to move the company’s shares through cryptic memes (tweeting pictures of ice cream cones and toy dogs).
Whatever comes out from GameStop one thing that’s guaranteed is that there will be plenty of emojis and memes.