I know this topic is controversial because of the feeding frenzy of January 2021, but let's just cut to the chase and look objectively at some of the bullish indicators for this stock:
•No Debt: Let's compare it to a handful of popular companies.
According to Apple's latest financial reports the company's total debt is $109.28B, with a market cap of $2.96T.
According to Microsoft's latest financial reports the company's total debt is $59.96B, with a market cap of $2.48T.
According to NVIDIA's latest financial reports the company's total debt is $11.89B, with a market cap of $1.19T.
According to AMC Entertainment's latest financial reports the company's total debt is $9.50B, with a market cap of $2.12B.
According to Tesla's latest financial reports the company's total debt is $2.33B, with a market cap of $802.01B.
GameStop's long term debt for 2022 was $0.041B (which is mostly comprised of a low-interest unsecured-term loan associated with the French government’s response to COVID-19), an 81.25% decline from 2021. GameStop long term debt for 2021 was $0.216B, a 48.55% decline from 2020. Ryan Cohen essentially entered the company in 2021 and demanded they pay off all their debt to become cashflow positive as soon as possible - this is an ironclad defense against market perturbations.
• $1.3B Cash On Hand:
Not only does GameStop have zero debt, but they have $1.3B to facilitate their pivot away from a dying sector (brick and mortar video game retailer) and towards a new market opportunity (Web3 gaming/banking in a ).
• Cash Flow Positive:
https://www.investopedia.com/articles/investing/060116/5-companies-huge-cash-flow-aaplvzmsftwmt.asp
• 350+ New Tech Hires
Including hires from Amazon, apple, and Chewy.
• New Self Custody Digital Wallet: They recently said they're basically cancelling their wallet because they aren't sure how the US government is going to regulate crypto, so it's better to just close the wallet and focus on their marketplace instead since the wallet was more for convenience rather than being a high-profit product of theirs. This demonstrates that GameStop is willing to take risks to be the first to a new market (Web3 gaming).
• $100M In Stock Buy Backs Available
• New Web3 Partnerships
Loopring and Protocol Gemini are working to create Web3 NFT gaming. "Ready Player One"-esque reality where gamers have ownership over their in-game items. Instances where Activision/Blizzard/PlayStation have taken items out of players' accounts, or closed accounts and therefore deleted items have resulted in (an undetermined but probably) huge amount of loss in value for these gamers that have spent countless hours grinding to amass in-game wealth. NFTs essentially immortalize these items via blockchain, where they are safely stored and the gamers' keys grant them access to the items to buy, sell, and trade on a marketplace where you can easily facilitate transactions like an Auction House. Enter the future of "play-to-earn" where people can make money by gaming.
This part may be conspiratorial but I love a good dystopian story: technology will displace workers just as it has through every technological revolution in the past (farming, industrial, computer, next will be AI or crypto) - there's no reason to think the next technological revolution will be any different, if anything it will be more disruptive due to the exponential property of exponential technologies (think nuclear, computer, and AI), meaning the rate of acceleration of growth gets larger with each new exponential technology.
• New NFT Marketplace: Buying and selling in-game items on an easy-to-navigate marketplace. Bugs are still being worked out, but that's because they're creating something that nobody has done yet (because crypto technology is relatively new).
• Ryan Cohen
Created Chewy (online pet supply retailer) from the ground up and became a billionaire by selling it. The main schtick for Chewy was incredible customer service, and excellent marketing.
• New Merch
• Overhauled Online Shopping Experience
There's a lot of theories about GameStop being shorted to al hell by hedge funds that use basket swaps to hide their short positions, essentially shuffling around shells indefinitely without ever having to close their positions; if GME goes to zero, they can close their short positions, but if it doesn't go to zero (continues to grow) then they can essentially never cover their positions without going bankrupt as long as GME trades on the stock market. Disregarding all of this conspiracy stuff and looking strictly at the fundamentals (listed above), these are major growth indicators for this company. I'd be interested to hear what negatives about this company's future you all have found, or reasons GameStop's growth may be inhibited. Thanks for reading!
