Market News: What is happening with GameStop stock in 2023?
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
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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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Stock Market News: Carl Icahn is short on GameStop shares.
Billionaire investor Carl Icahn began shorting GameStop during the height of the ‘meme stock’ frenzy around January of 2021.
Carl Icahn still holds a large short position in GME stock, according to people familiar with the matter.
Icahn started building the short position when GameStop was trading near its peak of $483 per share and still holds a large bet against the retailer’s shares, said people, asking not to be named due to the matter being private.
The billionaire investor who has added to his position from time to time is betting that GameStop’s stock isn’t trading on its fundamentals and will continue to fall, insiders said.
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Ryan Cohen Posts Picture with Carl Icahn
GameStop chairman Ryan Cohen posted a picture with Carl Icahn in October which many shareholders anticipated as bullish future news.
People began to speculate Carl Icahn was going to buy GameStop shares.
Little did shareholders know that the multi-billionaire investor has been betting against GameStop since the beginning of the ‘meme stock’ frenzy, per Bloomberg.
At the time of the photo, neither individual confirmed that Icahn would take a stake in the retailer.
Market News: Bed Bath & Beyond’s CFO Gustavo Arnal has died after insider trading claims.
Bed Bath & Beyond’s CFO Gustavo Arnal died shortly after facing lawsuit claims of insider trading with GameStop’s Ryan Cohen.
His death occurred days after the company had announced it would be closing 150 stores and cutting 20% of its corporate staff.
The incident occurred less than two weeks after the executive, 52, was named in a federal class-action lawsuit on allegations of federal securities fraud, insider trading, and breach of fiduciary duty, according to court documents, per Business Insider.
The Chief Financial Officer was found dead on Friday after falling from the 18th floor of a New York City apartment building.
Arnal was cited in the suit along with activist investor and GameStop chairman Ryan Cohen, who the lawsuit claims collaborated with the CFO in a “fraudulent scheme to artificially inflate the price of Bed Bath & Beyond’s publicly traded stock.”
The lawsuit claims Cohen — who is also the co-founder of Chewy and chairman of GameStop — approached the CFO about his “pump and dump” scheme in March 2022, and “convinced Gustavo that their plan would be a mutually beneficial one.”
BBBY CFO & GameStop Chairman allegedly collude in pump and dump scheme
Ryan Cohen BBBY insider trading lawsuit claims.
“Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns,” the lawsuit states.
Arnal allegedly worked with JPMorgan, which is listed as a defendant in the suit on claims the bank “aided and abetted” the plan by “enabling Cohen to use JPM’s accounts to effectuate such transactions and otherwise launder the proceeds of their criminal conduct.”
Ryan Cohen made a profit of $68.1 million from his stake in Bed Bath & Beyond.
Bed Bath & Beyond was one of the so called ‘meme stocks’ that was halted last year alongside AMC Entertainment stock and GameStop after retail investors had aimed to squeeze short sellers from their positions.
Investors and shareholders are still figuring out how to process this tragic death.
Leave your thoughts down below.
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So, will GameStop see a massive short squeeze again?
Here’s what we know.
Welcome to Franknez.com – the blog where you can digest content on stocks, crypto, entrepreneurship, and trending investing topics.
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And if you’re not investing in the stock market and would like to learn how to buy GameStop stock or know where to buy GameStop stock, read my beginners guide on how to start here.
GME stock
GameStop closed at $40.53 on Wednesday, August 17th.
Trading volume is currently sitting at 9.3 million with 12.6 million now being GameStop’s average volume.
Understanding the short-seller
GameStop has taken the entire internet and finance world by a storm. What is happening nowadays.
Retail investors over at r/wallstreetbets have opened Pandora’s Box on short-sellers and hedge fund institutions.
Short-sellers are investors who short the stock.
Shorting a stock is the process by which sellers essentially bet on the stock price to drop.
They borrow stocks at a higher cost and sell the stock low, profiting the difference.
How short selling works
We’ve seen GameStop drop down and consolidate at $40 after its gamma squeeze peaked close to $500 per share back in January.
The stock has made a massive climb after some serious consolidation. It looks like GameStop is prepping itself for another gamma squeeze.
Could we finally see that GME squeeze everyone’s been waiting for?! I think its time.
See, GameStop’s short interest is still rather high and not all short sellers closed their positions back in January.
This means the stock still has loads of room to go bonkers.
What is a short-ladder attack?
A short-ladder attack is a strategy performed by short-sellers where they bid on the stock at a significantly lower sell price and purchase it from one another.
Thus, driving the share price lower.
How do you spot a short-ladder attack?
When the stock knows nothing but gains, but something keeps pushing it down until over and over again, that’s when you’ll know.
Why GameStop has potential for a second short squeeze
Short-sellers didn’t learn their lesson from the first time. GameStop stock is still being heavily shorted.
With GameStop becoming a technology company, its value has not only significantly gone up but it now has even more potential to keep driving its momentum.
Retail investors have a strong conviction towards GameStop investment. This means they’re not willing to sell the stock which in turn creates a supply and demand scenario with short-sellers who have to close their positions.
GameStop NFT Marketplace News
Short Share Availability and Short Borrow Fee Rate
You can see GameStop’s short share availability and short borrow fee rate using this link (via. Short interest data)
This number of course changes every day and can be expected to rise as hedge funds continue to short GameStop stock.
However, the short borrow fee rate isn’t a catalyst for GME to squeeze.
I’m excited for my subcommunity that holds both GME and AMC stock because both are about to skyrocket past Pluto.
GME Stock Analysis
Roensch Capital goes over the data for trending stocks.
The information is very easy to understand and gives you insight in the market from an analysts perspective.
Be sure to check out recent videos as they’re being uploaded to stay updated with any changes that occur in the market with GameStop.
Important Advisory
It is important to note that I am not a licensed financial advisor.
Like many traders and self taught investors, all speculation is based on educated estimations based on highly reliable analysis, patterns, and documented news charts.
Volume is key to a second GameStop short squeeze
Just like AMC, GameStop will need to see a continuous runup in share volume.
When retail investors continue to buy and hold GameStop stock, short-sellers shorting the stock eventually have to buy back the stock.
This demand and supply scenario results in various gamma squeezes.
The gains we’ve seen with GameStop have been a series of gamma squeezes, or incremental gains.
Usually what follows after gamma squeezes is a short squeeze if it has enough volume.
The volume of shares depends on how much retail investors are purchasing GameStop stock or selling it.
This chart is only reference and is not GameStop’s current price – GameStop Squeezable
How Soon Will A Second GameStop Short Squeeze Happen?
There is so much volatility occurring in the stock market at the moment.
Such volatility is usually a sign of an upcoming short squeeze as we saw back in January.
Not only are retail investors experiencing a lot of volatility, but GameStop stock seems to be in bullish territory which is great for volume.
FOMO (fear of missing out) continues to bring in new retail investors which is a great driving factor to the stocks volume.
GameStop announces fourth quarter earnings for 2020 (ARCHIVE)
is GameStop squeezable? – GameStop Short Squeeze
Saving GameStop
Retail investors now have the power to save any company they wish to save.
Now it’s only a matter of time for GameStop to step up and raise capital so that they can innovate and provide more value back.
GameStop is currently looking for ways to operate more efficiently.
While the Reddit community was able to keep them from going bankrupt, the company as a whole will need to continue kicking butt.
Here’s what’s been going on with GameStop recently.
Current GameStop news
is GameStop still squeezable? – GameStop Short Squeeze
GameStop introduces Matt Furlong as the new CEO of the company.
GME shares are still up nearly 1100% this year-to-date with the company’s valuation at $15 billion.
Bullish GameStop options are still currently being heavily traded
Prior to GameStop, Matt Furlong worked at Amazon in Australia overseeing the growth of operations.
He also worked in brand and marketing for Procter & Gamble years before.
The skills to grow operations and to properly brand and market will benefit GameStop immensely.
What can retail investors do to tackle shorting?
If retail investors want to counter GameStop’s stock price from plummeting, they’ll have to continue to hold and buy the stock.
This short squeeze play will require patience.
Important advisory
If you hold a position in GameStop, it’s important that you ask yourself what your reason for holding is.
Does your DD provide you with the confidence to stick to it longer if need be?
If so, stick to your convictions and trust the process.
Unfortunately, I didn’t get in on GameStop before it gamma squeezed so I took a position in AMC instead.
Taking this position has been one of the best financial decisions I’ve ever made.
I would take a position in GameStop if it was more affordable.
Regardless, I like the stock and I love the community even more.
Will GameStop finally short squeeze?
I think GameStop is preparing itself to put short sellers out of their misery.
The stock has been havoc to hedge funds and we can tell they’re giving out primarily due to this massive breakthrough we’re seeing now.
And although I personally don’t hold GME stock, I have a lot of awesome memories at GameStop which I would actually like to share with you at the end of this article.
Now let’s talk about a little justice.
A major hedge fund that was attacking GameStop has now been reported to lose a significant amount of money.
A gamma squeeze are momentum gains. These usually occur from call options closing in the pocket resulting in heavy buys or purchases in the market.
A short squeeze is vigorous and can spike with no warning. This is where you see 100% gains in a matter of seconds and minutes. A short squeeze can even reach 1000% and 10,000% gains.
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GameStop outperforms the S&P 500
The market has been down all year, but GameStop has managed to outperform the S&P 500 index.
The SPY is down more than -17% this year while GME stock has managed to hover at -12.70% this year-to-date.
Looking at the 6-month chart and we’ll find GameStop outperforms the S&P 500 by a long shot.
On the 6-month chart, GameStop is up +42% and SPY is down -8%.
The one-month charts are fairly similar with both up about +2% in July.
And with GameStop’s stock split making the stock more affordable, it’s fair to say more investors will be jumping in on it.
It’s very possible GameStop short sellers end up getting caught at the wrong end of the trade again as the third quarter ends and we transition towards Q4 in October.
According to a report published by S3 Partners on July 21, GameStop has been among the top 10 most unprofitable stocks for short sellers during July 2022.
Other companies on that list include:
Tesla
Apple
Amazon
Nvidia
Visa
Coinbase
Lucid
Meta
Microstrategy
Most unprofitable shorts July 2022
The loss of -$443,463,550 is equivalent to a net loss of -24.22%.
Tesla, Apple, and Amazon had the most unprofitable shorts for the month of July, netting billions in losses.
The retail sentiment in GameStop is still rather strong and bullish.
And because GameStop’s reported short interest is still quite high at 23.86%, it’s very possible big momentum is able to squeeze the remaining short sellers from their positions.
Another short squeeze is still very possible for GME stock.
Are you a shareholder?
Leave your story in the comment section of the blog down below.
GameStop plans to increase the number of authorized shares of Class A common stock from 300,000,000 to 1,000,000,000 in order to implement a stock split of the Company’s Class A common stock in the form of a stock dividend.
The stock soared more than 14% after hours moments after the announcement.
Several call options within $170-$190 are in the pocket to fuel massive gamma squeeze for Friday’s rally.
To say GME shareholders are excited is an understatement.
GameStop surging 14% in the after-hours after announcing plans to ask shareholders for a stock split.@petenajarian looks at the options trade and @Bonawyn gives his thoughts on what it could mean for the stock $GMEpic.twitter.com/Bnhz6YJAO8
But GameStop shareholders aren’t the only ones who are excited.
The entire ‘meme stock’ crowd is happy to hear the news as most upswings have been in synchronicity with both GameStop and AMC.
GME stock is up more than 16% after hours while AMC which also closed red today is up more than 5%.
What type of dividend GameStop unveils is yet unknown, but a dividend usually comes in the form of monthly, quarterly, or annual compensation.
Investors are even speculating an NFT dividend could be underway.
However, this is a developing story so be sure to join the newsletter for immediate updates.
How does a stock dividend work?
Stock dividends pay shareholders a percentage from a company’s profits every month, every quarter, or annually, depending on the terms.
Shareholder will have two options when receiving stock dividends.
Cash out the dividend during every payment cycle
Reinvest the dividend back into the stock to accumulate more shares over time
If GameStop offers shareholders a traditional dividend (non-NFT), then shareholders will be able to use one of these two options.
How much investors earn every month, or every quarter will depend on how many shares an investor holds and on GameStop’s dividend yield.
The more shares of a company an investor holds means the more dividend yield is accumulated over a period of time.
A GameStop dividend could provide shareholders with a stream of passive income like most dividend stocks do.
Long terms stockholders tend to reinvest that dividend so that the number of shares they own compound over time, creating a snowball effect of increased value assets.
This is what Warren Buffett refers to as value investing.
So, how does a stock split work?
A stock split takes a share and splits it into two or more shares, dividing the share price by the number of splits.
This means for every share you own of AMZN stock you will receive 20 more shares when the stock splits.
AMZN stock is worth roughly $3,200 today.
If the stock split today and you only owned 1 share of stock, you will now have 20 shares each worth $160.
Owning 2 shares of AMZN stock would give you 40 shares valued at $160.
Tesla and Apple had stock splits earlier last year too.
GameStop’s stock split ratio is still unknown, but I will cover it as more information from the company is released.
What is the purpose of a stock split?
A stock split allows investors to purchase a company’s stock at much more affordable price.
Especially after a stock’s share price has surged to relatively high numbers.
Going back to Amazon as an example, while $3,200 per share is not feasible for most small investors, $160 per share incentivizes retail investors to buy the stock at a much lower entry point.
A GameStop stock split too could allow retail investors to buy the stock at a much lower price.
GameStop stock split explained
The company wants to increase the number of common stocks in the market from 300,000,000 to 1,000,000,000 to provide that capital to its shareholders in the form of a dividend.
So, it’s possible we don’t even see a traditional stock split (unless announced by GameStop).
The information we have available at the moment points towards this ‘dilution’ so-to-speak as a form of payment to GameStop’s shareholders in the form of a GameStop dividend.
GameStop’s board of directors has approved both stockholder proposals, but the stock dividend will be contingent (subject to change) on the final Board approval.
What does a GME stock dividend mean for short sellers?
The news of a GME stock dividend means retail investors will flood the market to buy GameStop, causing short sellers not only lose a lot of money, but to close their positions.
What happens to a short seller when a company announces a stock dividend?
If the stock is short on the record date, they will owe the dividend to their broker.
At this point a GameStop short squeeze is inevitable.
Shorts will be forced to buy back their shares to pay their brokers the dividend they’re entitled to once this proposal is executed, or they have the chance to close their short positions now before accumulating greater losses in the future.
Either way this plays out, short sellers are not in a good position right now.
Is GameStop a buy right now?
GameStop might be a little pricey at the moment, but investors buying in for a short squeeze have a chance at making a lot of money in the near-term future.
Are you a GME shareholder?
Leave a comment below and don’t forget to join the newsletter for updates.
GameStop let go of Boston Consulting Group (BCG) and the firm is now suing the retailer for $30 million in ‘unpaid’ fees.
BCG is now part of a scandal in a conflict of interest due to its connection to hedge fund and short seller Citadel.
GameStop said: “We do not believe it is in our stockholders’ best interests to pay the tens of millions of dollars sought by BCG, especially given their seemingly meagre impact on the company’s bottom line. We will fight this suit and are proud that GameStop no longer utilizes the likes of BCG for any services.”
BCG declined to comment.
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He later tweeted the following: “The only ones more useless than overpriced consultants are the ones that hire them”, referring to Citadel’s ex-BCG employees.
That’s right, numerous consultants over at BCG were later hired by Citadel.
— Salvatore – Memelord Extraordinaire 🍿🎠(@SalMemeLord) March 25, 2022
Retail investors are flooding @BCG on Twitter for infiltrating GameStop under the old board before Cohen came in.
BCG was hired to bring GameStop out of its ‘slump’ when it was struggling, according to the lawsuit.
The consulting group says it spent “tens of thousands of hours” on the project and “overachieved” by creating more profit improvement opportunities.
“It is confounding that the high-priced consultants at BCG claim to have delivered hundreds of millions in value for GameStop during a period when share price, sales and debt were at perilous levels,” GameStop said in an emailed statement.
GameStop said it’s “proud” it no longer uses the consulting group’s services.
Was GameStop infiltrated by BCG?
It’s incredible how these consultants seamlessly ended up at GameStop only to join Citadel afterwards.
For starters, GameStop’s Vice President and head of Corporate Strategy & Analytics Jackson Speakewas a consultant and project leader at BCG before joining the game retailer.
He also worked a Bain & Company, a company that would acquire failing businesses such as Toys R Us, and ‘bust them out’.
Except they wouldn’t bust them out, they would buy the companies using the struggling companies own credit.
This scheme is known as a Leveraged Buy Out (LBO).
Once Bain had control of the businesses, they would bring on their own board members and executives.
These executives would then pay themselves large bonuses prior to defaulting the business.
Hedge funds such as Citadel would then drive the company down to zero and keep all the money they made from short selling the stock.
Was this ring of manipulators attempting to take GameStop down?
Let’s dive deeper.
Citadel employees with BCG backgrounds
A few years ago, BCG was retained by the SEC due to concerns relating to organizational chain of command, the effect of high frequency trading, hiring and personnel practices, and oversight and reliance on self-regulatory organizations.
Mark Tritton, Bed Bath & Beyond’s Chief Executive Officer, said in the statement that the company looked forward to integrating the new directors’ ideas.
Two of the three members will also join a special committee to weigh strategic alternatives for Buybuy Baby (Bloomberg).
Buybuy Baby is an American chain of stores sell clothing, strollers, and other items for use with infants and young children.
Cohen stated the Bed Bath & Beyond needs to narrow its focus and maintain the right inventory mix to meet demand.
He suggested exploring the sale of Buybuy Baby.
“Our Buybuy Baby business is a tremendous asset, and we are committed to unlocking its full value,” said CEO Mark Tritton.
Ryan Cohen’s RC Ventures disclosed a 9.8% stake in Bed Bath & Beyond this month.
Marjorie L. Bowen, Shelly C. Lombard and Ben Rosenzweig have been named to the board effective immediately, and Bowen and Rosenzweig will join the four-person Buybuy Baby committee.Â
Leave your thoughts below.