GameStop Stock Split: Don’t Buy Into the Noise

InvestorPlace2022-07-09

GameStop's(GME) stock split shouldn't be looked at in isolation. This stock is a falling knife!The stock's beta sensitivity and the market's risk-aversion adds up to a mess.Video game sales continue ...

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Comments

CTJL
2022-07-10
CTJL
Just a gimmick to attract $$$.[Grin] [Sly]
Success88
2022-07-10
Success88
Ok
LeeWan
2022-07-10
LeeWan
Ok
mel18
2022-07-10
mel18
What is noise...
Geoz88
2022-07-10
Geoz88
Yes
Mindthink
2022-07-10
Mindthink
Ok

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This stock is a falling knife!The stock's beta sensitivity and the market's risk-aversion adds up to a mess.Video game sales continue ...</p>\n\n<a href=\"https://investorplace.com/2022/07/gamestop-stock-split-dont-buy-into-the-noise/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"GME","symbol_name":"游戏驿站","start_time":0,"source_url":"https://investorplace.com/2022/07/gamestop-stock-split-dont-buy-into-the-noise/","article_id":"1117455638","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1117455638","pubTimestamp":1657331617,"sourceInfo":{"source_id":"lsy1606302653667","name":"InvestorPlace"},"weMediaInfo":null,"summary":"GameStop's(GME) stock split shouldn't be looked at in isolation. This stock is a falling knife!The s","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"GME":"游戏驿站"},"translate_title":"游戏驿站股票拆分：不要买进噪音","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GME":0.9},"content_text":"GameStop's(GME) stock split shouldn't be looked at in isolation. This stock is a falling knife!The stock's beta sensitivity and the market's risk-aversion adds up to a mess.Video game sales continue to slide.Quantitative metrics convey that GME stock is overvalued.As investors, we need to be careful that we don’t treat noise as true parameters. GameStop(NYSE:GME) announced that it is executing a four-for-one stock split to lower its stock price and keep it accessible to its retail investor base.According to Michael Pachter of Wedbush Securities: “GameStop management knows that they have a 100% retail shareholder base and so, they are catering to them.”GME stock acted wildly post-announcement, rising by more than 6% in Thursday’s pre-market. However, as the stock is still fundamentally overvalued, many investors run the risk of buying into a fad. As such, I will outline GME stock’s fault lines so that market participants can make an informed investment decision.What a Stock Split Means for GME StockGameStop’s stock split won’t have any economic bearing on investors as they’ll receive additional shares to compensate for a reduced GME stock price. Nonetheless, the company’s stock split could alter GME’s market-based performance. According to an abundance of recent financial literature, a stock split could yield an annual excess market return of approximately 12.15% in the succeeding three years.Although market research tells us that GME’s stock split could yield excess returns, we can’t look at the event in isolation as GME stock faces an array of headwinds. For one, GME is a high-Beta stock, meaning that it is exceptionally susceptible to risk aversion during bear markets.A Fundamental Analysis of GME StockGameStop could face receding video game sales. Recent industry data showed that video game sales slid by19% in May, reaching a 24-month low. The industry’s May results come after an 8% decrease in April, conveying that a downward sales trendline has formed. The industry’s systemic decline is multifactorial, with pandemic re-openings, lightened core consumer spending, and supply-chain glitches all playing a part.GameStop’s first-quarter earnings report embodies its sensitivity to a softening industry as it missed its earnings target by six cents per share. GameStop’s hardware sales during the quarter amounted to 48.9% of its total revenue mix and its software sales comprised 35.1% of the company’s top line.Although GameStop has formed numerous new business relationships and expanded into the non-fungible token space, much of the company’s new ventures are growth stories, lacking the necessary substance to suggest that they’ll overturn the company’s organic business slowdown.Verdict on GME Stock PriceThere is no need to overthink things here. GME stock is overvalued. For example, the stock is trading at 1.44 times its sales and 6.11 times its fair book value. Additionally, GME stock growth metrics don’t exhibit numbers that justify its overvalued status. For instance, GME’s revenue growth underscores the industry median by36.29%. Moreover, its gross profit margin is razor-thin at21.53% and its CapEx has retreated by 14.68% in the past year.GME stock is a strong sell!","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9071074297,"gmtCreate":1657441082719,"gmtModify":1676536008440,"author":{"id":"4105075076266940","authorId":"4105075076266940","name":"CTJL","avatar":"https://community-static.tradeup.com/news/00c0da3b495a9d6aae8997a0135ebee0","vip":1,"crmLevel":1,"crmLevelSwitch":0},"htmlText":"Just a gimmick to attract $$$.[Grin]&nbsp;[Sly]&nbsp;","listText":"Just a gimmick to attract $$$.[Grin]&nbsp;[Sly]&nbsp;","text":"Just a gimmick to attract $$$.[Grin] [Sly]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9071074297","repostId":1117455638,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9073781827,"gmtCreate":1657418212369,"gmtModify":1676536004732,"author":{"id":"4101948424484190","authorId":"4101948424484190","name":"Success88","avatar":"https://static.itradeup.com/news/4408e1a22d73e99adb53aa65dde8ad91","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":4,"crmLevelSwitch":0},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9073781827","repostId":1117455638,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9073719089,"gmtCreate":1657417419441,"gmtModify":1676536004431,"author":{"id":"3558097748623340","authorId":"3558097748623340","name":"LeeWan","avatar":"https://static.tigerbbs.com/88769849d29a340fce73355c249755a4","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9073719089","repostId":1117455638,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9073467350,"gmtCreate":1657411525470,"gmtModify":1676536002606,"author":{"id":"4097201280076440","authorId":"4097201280076440","name":"mel18","avatar":"https://community-static.tradeup.com/news/cb8392cdbd4f593469aed779f484434a","vip":1,"crmLevel":5,"crmLevelSwitch":0},"htmlText":"What is noise...","listText":"What is noise...","text":"What is noise...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9073467350","repostId":1117455638,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9073463096,"gmtCreate":1657410927615,"gmtModify":1676536002436,"author":{"id":"3579002978614578","authorId":"3579002978614578","name":"Geoz88","avatar":"https://static.tigerbbs.com/40716588ae7919100620a5b5a9c48cac","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Yes&nbsp;","listText":"Yes&nbsp;","text":"Yes","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9073463096","repostId":1117455638,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9073489192,"gmtCreate":1657409614916,"gmtModify":1676536002167,"author":{"id":"4102837759709900","authorId":"4102837759709900","name":"Mindthink","avatar":"https://community-static.tradeup.com/news/89b965229f7209196369426d161728ee","vip":1,"crmLevel":2,"crmLevelSwitch":1},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9073489192","repostId":1117455638,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":189,"commentSize":18,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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