@deeplydisturbed

No doubt the volatility and constant downward price pressure makes it hard to stomach for holders...a 100% a gamble.

At for what's next, they've got cash in the bank, reduced inventory, and made a Q4 profit. Can they repeat? That remains to be seen, especially if inflation stays elevated and unemployment climbs.

Also, those Robinhood teenagers play games and are involved in crypto. GME made $89MM with their cypto/nft portal (still mostly beta) and if gaming & crypto collide, it could be a cash cow. In fact, it may be what made them profitable last quarter.

GameStop is at the crossroads of hype & practically. Their chances of upsetting Amazon long-term is highly questionable and the regulatory pressure on crypto doesn't bode well for their NFT presence.

<insert Obama 'if if if if if if if if if' meme here>

Considering their market cap is higher than many mid-sized banks, their used-game section may provide a better return. IF they overcome inflation, unemployment, & regulations (or at least survive it), their future could be the moon well before anyone sees sub-$1 discounts. Either way, they've done an admirable job to brush off the meme-stock baggage and give themselves a chance at a bright future.

Back to the chop until the latest banking crisis is over. It was only a matter of time before the finance section was in the hot seat. Less than 2 years before the election so the economy will probably be artificially popped up until then... they've become masters of kicking the can down the road. If Trump runs and wins, you can be sure they'll trigger the mother of market crashes.

GameStop or GameOn?

Long time no see... here's a recap and update on GME...

A long time ago (about 3 years now), Covid came into the limelight which shut down the world for several years. The markets crashed in Feb 2020, had 3 significant sell-offs in March, but were back on the rise by April 2020. The global coordination of shut downs stymied the economy and allowed predatory firms to capitalize on failing or presumed-to-be-failing companies.

Gamestop was one of these companies as large firms took massive short positions in anticipation of another brick-and-mortar failure. What the large firms failed to see was the work of a trader-with-a-podcast (roaringkitty) whom had become popular with all the stay-at-home millennials with nothing to do - since everyone was unemployed or forced to stay in their homes.

The momentum gained with roraringkitty spilled into r/wallstreetbets which set the world on fire with GME. People with nothing to do and nothing to lose read the DD (due diligence) and decided to 'ape' into GME (and several other stocks) which have since been branded "meme stocks".

Sadly (for the institutions), their desire to bankrupt GME into the void of nothingness was met head-on by a vibrant, cheerful, and enthusiastic collection of people around the world. A collection of people, now referred to as 'Apes', bought into GME for many reasons, including nostalgia. You see, it had come to light that the kid favorite toy store "Toys-R-Us" was also taken out by predatory business practices. Kids world-wide never understood why their beloved giraffe was suddenly gone. When Apes learned of a series of hostile takeovers, by various global financial institutions, killed their weekend destination for all things good in their life, the Apes decided to fight back.

And fight back they did.... By acquiring GME shares and directly registering them in their names instead of through broker custody. The sudden acquisition of shares forced a short squeeze and an online brokerage to turn off the sell button, forcing Apes to hold (hodl) for a long time. The Apes laughed and bought more.. and DRS'd more.... and have continued to buy and DRS.

Now we'll fast forward to recent events.....

Gamestop (GME) announced 2022 Q4 earnings yesterday with the following highlights:

• No debt
• $1.3B (billion) in the bank
• Reduced inventory from ~$900MM to $600MM
• $48MM profit for 2022 Q4 (up from a ~$150MM loss 2021 Q4)

In afterhours trading, GME was up 48%... at one point it was up over 50%.

So what's the greater impact?
It has been theorized that many large financial institutions had taken a massive short position in GME before the squeeze. The squeeze prevented most short positions from being covered. Financial institutions used complex swaps and other instruments to "cover" their short positions. One such entity has been theorized to be the hedge fund Archegos. Archegos is now defunct and the owner arrested for fraud and racketeering. The bank on the hook for much of the Archegos losses? Credit Suisse.

If you're not living under a rock, you know Credit Suisse is under global scrutiny being forced to merge with UBS. While the main excuse if increasing interest rates, inflation, and other excuses.... the long short-positions were inherited by CS, never closed, and remain a heightened risk for the new owners.

So, here we are... 3 years since the start of covid, 1 year since the original squeeze. GME did not fold, but rather has flourished. The short can was kicked down the road into the middle of a global financial tsunami.

What happens next is anyone's guess.... but IMO, GME is here to stay.
The financial institutions will continue to play hot potato with their inherited credit default swaps (CDS) and other sophisticated instruments to prevent a massive market melt-down.
Apes will continue to buy & DRS while the financial overlords figure they're way out of a massive mess.

Well... its been interesting for the traditional "meme" stocks..... (Tradition and Meme in the same sentence? typing that out was cringeworthy. )

Anyway... GME did a stock split via dividend. If reports are true, some brokers processed the split as a normal split, others did the split via divided. Its complicated an already complicated situation (thanks DTCC). Separately, the GME NFT portal marches on while offering a connection to the crypto-generation. Looking forward to GME's next move.

AMC released APE (AMC Preferred Equity) which was met with much fanfare and numerous trading halts on Day 1 (yesterday). Some brokers have reportedly not given APE to AMC holders yet which is causing a ruckus. Remains to be seen how the brokers resolve the discrepancy in both GME & AMC.

Markets appear to be teetering on the brink of a meltdown. Real Estate is in rough shape with rates increasing, deals falling through, and new buyers are drying up. Inflation is skyrocketing in Europe and expected to be worse as winter approaches (energy costs through the roof). The US Gov't doesn't seem interested in putting a cap on spending (Ukraine, student loan debt, inflation 'stimulus' checks) and the FED still hasn't moved MBS from their balance sheet (which apparently is a requirement - if the idea of reducing inflation is to happen). Teachers are already striking ahead of the start of the school year and would be the harbinger of higher local taxes on top of current inflationary concerns.... seems to be a perfect storm.

Started reading about Debt Spirals (which the US appears to be in) and there not many options to get out. With the 2024 election cycle starting to gain steam (already seeing some political ads which seems more like A/B testing for candidate favorability), will the gov't raise taxes, join the war, or just keep the money printer on?

Welcome to the 2nd half of 2022... Hold on!