GameStop stock is one of the few companies who actually crushed in during the bear market in 2022.
The stock, currently trading at $18.40, amassed worldwide attention in 2021 when the ‘meme stock’ frenzy took Wall Street by surprise.
Today, GameStop has one of the most raving fanatics and shareholder base which without a doubt are the backbone of the company.
How much of GME’s float is owned by retail investors?
Approximately 70% of the float is owned by individual shareholders according to Vickers Stock Research.
GameStop’s Chair Ryan Cohen himself owns more than 12% of GME shares.
These are held through Ryan’s holding company RC Ventures, which Vickers considers to be Institutional ownership.
So, where is GameStop headed in 2023?
Let’s break down some important figures to determine just that.
Where is GameStop Headed in 2023?
2022 was another memorable year for GameStop.
Under Chairman Ryan Cohen and CEO Matt Furlong, it was the first year of the implementation of the company’s turnaround plan, which aimed to transform GameStop into a tech-oriented business.
This consisted of investment initiatives in e-commerce, an NFT marketplace, and Web 3.0 gaming.
But the company needs to focus on raising more capital despite its $1bn cash pile and having virtually no debt.
GameStop’s quarterly cash burn averaged at $400 million per quarter throughout 2022.
This means that if the company’s operating cash flow remains at similar levels next year, GameStop’s balance sheet could run out of cash in the next two years.
Over the last four quarters, GameStop’s sales have grown only by 1.3%.
Still, what made 2022 so significant for GameStop is the reporting of positive cash flow for the first time since Q1 of 2021.
Cashflow came in at $177.3 million this year compared to an outflow of $293.7 million last year.
This is already great news for GameStop going into 2023.
GME Stock Remains Popular Amongst Retail Investors
In 2023, GME stock will remain popular amongst retail investors, primarily due to the massive community of shareholders who are looking to take GameStop shares to the moon.
During the spark of the ‘meme stock’ frenzy, GameStop shares rose to $483 per share, a superior all-time high.
But shareholders are not convinced the stock is done running.
In fact, many GME shareholders believe share prices may skyrocket to new records, primarily due to overleveraged shorting in GameStop.
According to GameStop, shareholders registered 71.8 million shares via the transfer agent.
This equates to a massive 30% of GameStop’s total float – something that’s very unlikely in the markets.
Transfer agents can’t lend shares for short sellers who want to bet against GameStop.
The high number of market participants taking this action signifies that retail investors are here to stay.
Final thoughts
2023 opens up new possibilities for GameStop as e-commerce, NFTs, and Web 3.0 gaming continues to grow.
While the company may benefit from arming itself with more short-term capital, GameStop enters the new year with positive cash flow, an incredible start for the company as many continue to struggle.
Even at a fundamental level, analysts are predicting GameStop stock to rise significantly higher next year.
But I’m curious to know your thoughts on where GameStop stock is going in 2023.
Leave your thoughts down below.
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