Fans in this country are also familiar with the stores of the retail chain Gamestop – and many of them are also aware of the hype surrounding the company's shares. Recently, rocket-like price increases have been followed by drastic slumps. But the story is not yet finished.
This text is for information purposes only and does not constitute an investment recommendation.
Gamestop is a brand that is known to almost every gaming fan - and yet the company is struggling with its own business model: The shops are usually in the best locations - the rents are correspondingly high. The revenues cannot keep up. There are several reasons for this, but one is central: game sales are weakening because the market has changed. Physical boxes of video games are gradually becoming run-of-the-mill models, and Gamestop's used prices are usually too high and therefore not very attractive. And while it is theoretically possible to make money with the other items in the store, the target group for the "nerd items" is increasingly shopping online. There, the competition is fierce, almost overwhelming.
According to its own information, Gamestop has around 5.500 branches worldwide - but last year the company is said to have lost ground again. In Germany, fans can find around 70 branches, spread across Germany in both large and smaller cities. And yes: Despite the weak business, Gamestop offers scene fans a colorful place to browse products from the gaming industry: hundreds of Funko pop figures, plush toys, cups, goodies - you could decorate your game room with purchases from Gamestop as you wish. But that alone is not enough for the company's financial success. The hope is now for a transformation. Rumors have been around for a long time: a focus on evaluating trading cards, entering the crypto world, even Gamestop as a hedge fund are being discussed as ideas. Increasingly recently, because Gamestop shares (GME) are currently driving the internet crazy.
The past few days have been more than just eventful for investors in Gamestop shares: GME is subject to high volatility, not least because the stock has become a plaything. A mega jump in price was followed on Friday by a severe setback. The drop was around 40 percent. The reason: Gamestop had surprisingly announced its quarterly report and a loss of 12 cents per share, while analysts had expected -9 cents. Gamestop also announced that it intends to sell more shares: up to 75 million. The company had informed the US Securities and Exchange Commission (SEC) of a corresponding filing.
And then there was the trigger for the whole spectacle: "Roaring Kitty". Keith Gill, his real-life name, appeared out of nowhere after about three years. The meme stock scene is expecting a repeat of 2021 to happen. With a massive short squeeze, Gamestop shares made headlines and caused fear among hedge funds, some of which had to cope with enormous losses. Trading in Gamestop shares has long since become an internet movement: the scene, especially on Reddit, is about money, but also about principle: they stand up to the hedge funds, criticize them, and want to see those companies that contributed to Gamestop's downfall bleed financially.
Wall Street firms and the US media believe that the fury has come to an end after the recent price collapse - but the story is not over yet, because the first stream of "Roaring Kitty" in around three years in particular has the scene enthusiastic. They believe that Friday's apparently clumsy YouTube livestream was precisely that. Instead, some Reddit users consider the video and Gamestop's actions themselves to be a "bear trap" that could send hedge funds reeling. What exactly Keith Gill's motives are and what plans CEO Ryan Cohen has for Gamestop are completely unclear. At the same time, this also seems to mean that there can still be surprises with corresponding price fluctuations in all directions.
In recent days, the stock has jumped to over 70 US dollars; the stock is currently trading at around 30 US dollars.
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