SNEJF - GameStop Stock: Disconnected From Fundamentals

2024-06-03 18:04:49 ET

Summary

• GameStop Corp.'s recent price movements are disconnected from the company's fundamentals and outdated business model.
• The company's sales in the hardware/accessories, software, and collectibles segments have shown no meaningful growth, with continued declines year after year.
• GameStop's failure to adapt to the digital gaming market and competition from platforms like Microsoft and Sony pose significant challenges.
• While traders may seek to take advantage of the high volatility fueled by Roaring Kitty, long term investors should stay away.

Overview

As an investor who typically looks at companies through a long-term lens, GameStop Corp. ( GME ) has never been appealing. I believe that the huge price movements fueled by the meme stock era has clouded investors' judgement in pursuit of quick gains. While I fully see the appeal of chasing the large gains from heightened volatility, I stick to the principles of looking at the health and sustainability of the core business model. I previously covered GameStop back in February and rated it as a Strong Sell....

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