Gone are the days of sensible

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2021-09-06

Gone are the days of sensible Buffet/Graham styled investing

GameStop Remains the Never-Ending Story, But Still Stay Away

The risk/return proposition is not in your favor with GME stock More than seven months after it made

GameStop Remains the Never-Ending Story, But Still Stay Away

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·2021-09-06
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That is, it’s still trading at a price leaps and bounds above the underlying value of its video game retailing business.\nSure, there’s the potential for its e-commerce transformation, spearheaded by its chairman,Chewy(NYSE:CHWY) co-founder Ryan Cohen. Yet that’s not what’s keeping it at today’s prices (around $212 per share).\nAt best, its e-commerce potential gives it a maximum valuation of&nbsp;between $50 and $100 per share.\nSo, if not its e-commerce catalyst, what is keeping the stock at low triple-digit prices? Its meme stock blue-chip status. Only one other name holds this status:AMC Entertainment(NYSE:AMC). Both were the original meme stocks. Both have also remained at the top of the&nbsp;stocks most talked about&nbsp;on&nbsp;Reddit’s&nbsp;r/WallStreetBets subreddit. Other meme favorites have moved up and down the list, and/or have boomed and busted. These two have also seen their own respective ebb-and-flow.\nYet it likely won’t be until the meme stock trend goes the way of the pet rock that both names finally collapse in price. So, should you buy given the music hasn’t stopped? Not so fast. The exact time it happens is tough to handicap, as it’s still a matter ofwhenrather thanif.\nEven so, with risk/return out of your favor, it’s best to stay away.\nThe Game Hasn’t Stopped Just Yet for GME Stock\nYou can argue that GameStop’s valuation is not reflective of its underlying value until the cows come home. Will it have an impact on its future price action? Likely no. It may not move as strongly on hope, hype and momentum as it did a few months back.\nYet GME stock still trades divorced from its fundamentals. AsSeeking Alpharecently put it, there’s been no sign of“Reddit fatigue.”Traders are getting excited for it again ahead of its next earnings release on Sept. 8, but not so much do to with the results themselves.\nInstead, the excitement is about the company possibly generating enough positive earnings that quarter to outweigh losses from its three prior fiscal quarters. If that happens, GameStop may&nbsp;meet the criteria for inclusion&nbsp;in the&nbsp;S&amp;P 500. Inclusion could give shares a further pop, as is commonly seen with stocks added to an index.\nNow, before you run out and buy this, keep a few things in mind. One, it’s questionable whether results from this quarter will bring it completely out of the red for the trailing 12 months. Second, the S&amp;P index committee isn’t required to add a new stock just because it meets all the criteria. It could reject it, due to its valuation built on its meme stock status rather than its fundamentals.\nDespite Resiliency, Why You Don’t Want to Buy it\nEven if the S&amp;P inclusion angle runs out of steam, don’t expect GME stock to start tumbling in the immediate future. Until the market sees a correction that scares off much of the retail money and causes meme stocks to sink to a greater extent than stocks overall, both this stock and AMC stock will likely stay resilient.\nTo some, this may mean it’s not too late to profit. However, it’s not a gamble worth making. Yes, we haven’t seen markets get volatile again. So far, an increasingly unstable world hasn’t stopped the market from making new highs. Nonetheless, it’s too early to say it won’t happen.\nThe Federal Reserve may remain dovish. It may take time for Fed tapering and interest rate increases to play out. Other looming issues, though, could have an impact. Be it the outbreak of Covid-19’s Delta variant, slowing economic growth, or issues with inflation that may not get resolved as long as the Fed refuses to raise interest rates.\nIf a correction happens? It’ll likely hit meme stocks the hardest. Even GameStop. If markets get rocky, the newbie investors not used to a bear market could panic sell, sending GME stock to substantially lower prices. A move down below $100 per share seems possible.\nThe Bottom Line\nGameStop will likely continue to trade at inflated prices until the trend that sent it “to the moon” finally fades. For the time being, this may mean shares hold steady. Or perhaps move higher, while the S&amp;P inclusion catalyst remains on the table. Even as this is the case, still avoid it.\nPutting it simply, possible gains from here with GME stock pale in comparison to the potential losses that could be seen once the music stops.","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>GameStop Remains the Never-Ending Story, But Still Stay Away</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGameStop Remains the Never-Ending Story, But Still Stay Away\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-09-06 11:07 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2021/09/gme-stock-remains-never-ending-story-but-stay-away/>InvestorPlace</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nThe risk/return proposition is not in your favor with GME stock\nMore than seven months after it made Wall Street history,GameStop(NYSE:GME) stock still manages to punch above its weight. That is, it’s...\n\n<a href=\"https://investorplace.com/2021/09/gme-stock-remains-never-ending-story-but-stay-away/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"GME":"游戏驿站"},"source_url":"https://investorplace.com/2021/09/gme-stock-remains-never-ending-story-but-stay-away/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1114558402","content_text":"The risk/return proposition is not in your favor with GME stock\nMore than seven months after it made Wall Street history,GameStop(NYSE:GME) stock still manages to punch above its weight. That is, it’s still trading at a price leaps and bounds above the underlying value of its video game retailing business.\nSure, there’s the potential for its e-commerce transformation, spearheaded by its chairman,Chewy(NYSE:CHWY) co-founder Ryan Cohen. Yet that’s not what’s keeping it at today’s prices (around $212 per share).\nAt best, its e-commerce potential gives it a maximum valuation of between $50 and $100 per share.\nSo, if not its e-commerce catalyst, what is keeping the stock at low triple-digit prices? Its meme stock blue-chip status. Only one other name holds this status:AMC Entertainment(NYSE:AMC). Both were the original meme stocks. Both have also remained at the top of the stocks most talked about on Reddit’s r/WallStreetBets subreddit. Other meme favorites have moved up and down the list, and/or have boomed and busted. These two have also seen their own respective ebb-and-flow.\nYet it likely won’t be until the meme stock trend goes the way of the pet rock that both names finally collapse in price. So, should you buy given the music hasn’t stopped? Not so fast. The exact time it happens is tough to handicap, as it’s still a matter ofwhenrather thanif.\nEven so, with risk/return out of your favor, it’s best to stay away.\nThe Game Hasn’t Stopped Just Yet for GME Stock\nYou can argue that GameStop’s valuation is not reflective of its underlying value until the cows come home. Will it have an impact on its future price action? Likely no. It may not move as strongly on hope, hype and momentum as it did a few months back.\nYet GME stock still trades divorced from its fundamentals. AsSeeking Alpharecently put it, there’s been no sign of“Reddit fatigue.”Traders are getting excited for it again ahead of its next earnings release on Sept. 8, but not so much do to with the results themselves.\nInstead, the excitement is about the company possibly generating enough positive earnings that quarter to outweigh losses from its three prior fiscal quarters. If that happens, GameStop may meet the criteria for inclusion in the S&P 500. Inclusion could give shares a further pop, as is commonly seen with stocks added to an index.\nNow, before you run out and buy this, keep a few things in mind. One, it’s questionable whether results from this quarter will bring it completely out of the red for the trailing 12 months. Second, the S&P index committee isn’t required to add a new stock just because it meets all the criteria. It could reject it, due to its valuation built on its meme stock status rather than its fundamentals.\nDespite Resiliency, Why You Don’t Want to Buy it\nEven if the S&P inclusion angle runs out of steam, don’t expect GME stock to start tumbling in the immediate future. Until the market sees a correction that scares off much of the retail money and causes meme stocks to sink to a greater extent than stocks overall, both this stock and AMC stock will likely stay resilient.\nTo some, this may mean it’s not too late to profit. However, it’s not a gamble worth making. Yes, we haven’t seen markets get volatile again. So far, an increasingly unstable world hasn’t stopped the market from making new highs. Nonetheless, it’s too early to say it won’t happen.\nThe Federal Reserve may remain dovish. It may take time for Fed tapering and interest rate increases to play out. Other looming issues, though, could have an impact. Be it the outbreak of Covid-19’s Delta variant, slowing economic growth, or issues with inflation that may not get resolved as long as the Fed refuses to raise interest rates.\nIf a correction happens? It’ll likely hit meme stocks the hardest. Even GameStop. If markets get rocky, the newbie investors not used to a bear market could panic sell, sending GME stock to substantially lower prices. A move down below $100 per share seems possible.\nThe Bottom Line\nGameStop will likely continue to trade at inflated prices until the trend that sent it “to the moon” finally fades. For the time being, this may mean shares hold steady. Or perhaps move higher, while the S&P inclusion catalyst remains on the table. Even as this is the case, still avoid it.\nPutting it simply, possible gains from here with GME stock pale in comparison to the potential losses that could be seen once the music stops.","news_type":1},"isVote":1,"tweetType":1,"viewCount":754,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":52,"xxTargetLangEnum":"ORIG"},"commentList":[{"id":5767573,"commentId":"5767573","gmtCreate":1630899578591,"gmtModify":1663233452571,"authorId":3577525278195004,"author":{"id":3577525278195004,"idStr":"3577525278195004","authorId":3577525278195004,"name":"DLiew","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":817982478,"objectIdStr":"817982478","type":1,"supId":0,"supIdStr":"0","prevId":0,"prevIdStr":"0","content":"True","text":"True","html":"True","likeSize":0,"commentSize":0,"subComments":[],"verified":10,"allocateAmount":0,"commentType":"invalid","coins":0,"score":0}],"hasMoreComment":true,"orderType":2}