Скачать или смотреть GameStop's Earnings Disappoint

Gary Brode of Deep Knowledge Investing and Robb Fahrion of Flying V Group discuss the 5 Things to Know in Investing This Week: The Pivot Week Issue

-GameStop $GME returns to profitability, but look at the fall in revenue. It’s a problem.

DKI Summary:

GameStop (GME) delivered a surprise in its latest earnings report, posting $0.01 per share when analysts expected a $0.09 loss. However, the good news was tempered by revenue of $798.3 million, which missed estimates by 11.3% and fell 31% from last year. As Wall Street heavyweights manipulate the short interest and social media titans draw continued interest to the memest of the meme stocks, fundamental performance continues to decline.

DKI Takeaway:

Adding intrigue, management hinted at a potential 20MM share secondary offering, flagged in a May 2024 prospectus. The last time they said this, a share offering followed quickly. Investors might want to watch their back on this one. Management also made it clear: “There are no current plans, commitments, or arrangements to make any acquisitions or investments.” So, while they’re raising capital, it’s not for any exciting new ventures or growth projects. (Investors should ask both themselves and management why the company is selling stock with no plans to use that capital.) $GME investors are excited about positive earnings and cash on the balance sheet. They hope the company will buy a business or Bitcoin. The steep drop in revenue makes us question the value of the core business and challenges the fundamental case made by Roaring Kitty a few years ago. The cash comes from selling huge amounts of stock; not from operations. Our view is owning Bitcoin is fantastic and that you can do so without buying $GME. We also prefer self-custody for Bitcoin. Reach out if you need help on how to do that.

Your links:

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https://deepknowledgeinvesting.com/we...

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Flying V Group: https://www.flyingvgroup.com/

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