Counterpoint:
"Most analysts" are hum-drum Wall Street hacks who cover dozens of companies and don't really have a clue about how the lion's share of them are run. I remember a few years back there was one analyst who kept talking about how NAND keeps getting cheaper and that's hurting memory suppliers...but the analyst's metrics didn't normalize for advancements in NAND speed nor the maturing of capital investments, so the analyst was basically looking at totally expected price declines over time and interpreting it as for some kind of static commodity while claiming it as a bear thesis.
A few of them are really clever and knowledgeable. The rest are chumps.
It's extremely difficult to judge GME based on regular metrics because their long-term outlook is a function of strategy and their short-term survival is a function of COVID. Sure, the company sells stuff that you can buy online, and sure, they sell it at malls and other places where nobody goes these days, but its stock was over-shorted and this was going to happen sooner or later anyway.
Maybe my numbers are off, so correct me if I'm wrong....At today's closing price, GME, which has $6B/yr revenue, is worth a sixth of BBY, which has 43B/yr revenue.
GME sells consoles and consumer electronics in addition to games, so I'd put BBY on the short list of comps for sure. But if you think the product mix is so different as to make them incomparable, that's ok. Pick a better metric and explain why GME was accurately priced at $260mm market cap when the company does billions in revenue.
Then, go back and explain why AMD was worth $2/share in 2014.
Then, go to every other heavily shorted name and wave your hands around looking for reasons to justify obviously overshorted valuations.
If enough people want GameStop to succeed then it will. Ironically it’s the same thesis that wealthy SV investors go by when they decide to invest in a startup. Except the word invest is usually misleading. Most of the time they’re just looking for a vehicle to inject capital and influence, and the people and product are interchangeable parts used to achieve a a profitable outcome.
The sentiment story is that if enough people want to pay $150 a share for approximately $0/yr in earnings, they will. What this glosses over is the reason for the sentiment, the question: "why do people want to pay this?"
Traditional stories analysts tell would have people pay $150/share because they expect $8-$15/yr. This story is that people will pay $150/share because people want a way to say 'fuck wall street' and 'fuck analysts' and have unreasonable expectations of becoming wealthy. The former sentiment is sustainable in a way that the latter story kinda isn't.
More like – if enough people want GameStop to succeed then it has a slightly better chance of succeeding than if they didn't.
Chances are that it is still a bubble that will eventually pop, like most others before it.
$AMD was at $0.15, AMD was the only company besides Intel that actually had x86-64 patents. Intel would have never let AMD fail because they would be a monopoly and that is worse than leading a duopoly.
Notice the bean counter Intel ceo, the yields getting worse over time, the performance not improving besides a 1-2% year over year and Intel getting complacent, repeatedly to screwing over the customer with requirement of buying a new motherboard with every new release.
AMD was a steal for anyone in the know.
Counter argument 2:
Any price target posted by Citron was wrong.
Counter argument 3:
Why would any analyst give a proper price target when they can screw you over?
Counterpoint 1: AMD was a chipmaker with skilled engineers on staff and a growth story where they could seize market share with better technology. Gamestop is a retailer with retail clerks on staff and a story where increasing competition from PC and console app stores slowly eats away at their market share. Exact same thing, right?
Counterpoint 2: Saying the price target is wrong is one thing, and may in many circumstances be eminently defensible. Saying the correct price is $50-$150 is another.
Counterpoint 3: This exemplifies the thinking going on here. "I don't understand the stock market and think someone is screwing us over. Let's define our own alternate reality, and gang up on them for revenge! Revolution!" Last time we saw that show was January 6. For a few people, who get out at the right time, this will be a much more successful revolution, but on the whole, it succeeds only with a transient disruption, and harm the individual would-be revolutionaries the most.
Ouff.
> AMD was a chipmaker with skilled engineers on staff and a growth story where they could seize market share with better technology. Gamestop is a retailer with retail clerks on staff and a story where increasing competition from PC and console app stores slowly eats away at their market share. Exact same thing, right?
Do your due diligence this is just one, https://www.gmedd.com, there have been many others and they all converge to the same argument. GME is worth much more than the $10 PT given by analysts.
> Counterpoint 2: Saying the price target is wrong is one thing, and may in many circumstances be eminently defensible. Saying the correct price is $50-$150 is another.
Except citron was wrong in every single price target they have given by more often than not an order magnitude, except for 1. If you pay enough attention, you will see that many of the same 'pages' play both the bull and bear game, if only to come out and say they were correct.
> Counterpoint 3: This exemplifies the thinking going on here. "I don't understand the stock market and think someone is screwing us over. Let's define our own alternate reality, and gang up on them for revenge! Revolution!"
Had you done your due diligence and paid attention to the situation as it unfolded, you'd have seen that the market made sense, the stock was over shorted and in no way reflective of the actual price targets created by various models and analyses such as the one I linked above.
> Last time we saw that show was January 6. For a few people, who get out at the right time, this will be a much more successful revolution, but on the whole, it succeeds only with a transient disruption, and harm the individual would-be revolutionaries the most.
We saw that show in every single revolution. This only reinforces the belief that the average proletariat is getting screwed over and manipulated by the same class of people. Hint, it was the proletariat that paid for the greed, not the institutions, the hedge funds or the MMs. It is the proletariat that are stuck between a rock and a hard place, it is the proletariat that are getting manipulated into intra class wars.
The market is broken, at least retail investors are benefiting for once.
A share of AAPL now costs $139, a share of GOOG costs $1860. How would you compare the two companies based on that? How does the price of a single share relate to whether or not the company has positive or negative earnings?
Either stock is terrifying.
Which is exactly why Wall Street and financial media is denigrating it. They hate that they don't have the edge, or a monopoly on profits in this case.
right now though the chaos has nothing to do with the underlying value. now it's all about the squeeze. but that's never been part of the bull thesis
OK, I'll pay $300 for a stock that will be worth $169 in 4 years assuming that Ryan Cohen has 100% chance of using is legendary Ryan Cohen powers to seize digital game sale margins from all the walled gardens, because somebody on WSB bought a domain name and used orange and green highlights in a spiffy PDF.
I'm sure there was some bull case for the company, and it might have had a snowball's chance in hell around $14 or even $20/share. But at $60+ ? What on God's good earth is supposed to make the company worth that much?