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GameStop: The Meme Days Are Over

May 03, 2022 7:37 AM ETGameStop Corp. (GME)356 Comments
Dalton Hicks profile picture
Dalton Hicks
1.46K Followers

Summary

  • This is a technical analysis approach to GameStop, as all fundamentals went out the door over a year ago.
  • GameStop's chart exhibits a massive descending triangle, deteriorating levels of support, low volume, and a RSI in free fall.
  • I am bearish on GameStop and believe prices will fall below $90 per share by the end of FY22.

A concept image consisting of a notebook with the word "HODL" written on it.

Matthew de Lange/iStock via Getty Images

Thesis:

GameStop (NYSE:GME) brought a whole new level of speculative trading to the broader financial markets. The power of social influence and accessibility to brokerages unleashed a new monster known as 'Meme Stocks.' The idea was

This article was written by

Dalton Hicks profile picture
1.46K Followers
My investment analysis is focused on identifying well-established companies trading appreciably under intrinsic value. I believe in deep value, long-term investments. My objective is to generate exceptional returns from well-known, less volatile blue chips. I am a mortgage loan officer, and the head of a limited investment partnership. I hope my contributions and analysis can provide valuable insight to fellow investors.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (356)

Gunne profile picture
GME top performer.
Power to the players.

twitter.com/...

Probably nothing.

Or...

c.tenor.com/...
Yeattt

images.gr-assets.com/...
Gunne profile picture
www.sec.gov/...

Adjustments. To prevent the dilution or enlargement of benefits or potential benefits intended to be made available under the Plan, in the event of any corporate transaction or event such as a stock dividend, extraordinary dividend or other similar distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities, the issuance of warrants or other rights to purchase Shares or other securities, or other similar corporate transaction or event affecting the Shares with respect to which Awards have been or may be issued under the Plan (any such transaction or event, a “Transaction”), then the Committee shall, in such manner as the Committee deems equitable adjust (i) the number and type of Shares that thereafter may be made the subject of Awards, (ii) the number and type of Shares subject to outstanding Awards, (iii) the grant or exercise price with respect to any Award, and (iv) any performance criteria expressed in whole or in part on a per Share basis; provided, in each case, that with respect to Incentive Stock Options, no such adjustment shall be authorized to the extent that such adjustment would cause such options to violate Section 422(b) of the Code (unless otherwise agreed by the Committee and the holder of such Incentive Stock Option); and provided further, that the number of Shares subject to any Award denominated in Shares shall always be a whole number. With respect to each adjustment contemplated by the foregoing sentence, no such adjustment shall be authorized to the extent that such adjustment would cause an Award to violate the provisions of Section 409A of the Code (unless otherwise agreed by the Committee and the holder of such Award). Any adjustments made by the Committee shall be binding on all Participants. If the Committee determines that an adjustment in accordance with the provisions of this Section 11.6 would not be fully consistent with the purposes of the Plan or the purposes of the outstanding Awards under the Plan, the Committee may make such other adjustments, if any, that the Committee reasonably determines are consistent with the purposes of the Plan and/or the affected Awards.

www.sec.gov/...
S
Below $90?

Jeez man. Make a real call. Below $20.
Dalton Hicks profile picture
@SomeGuy14 I state it will trade in a channel between $40 - $90. I also state a break below $40 would send shares to pre-short squeeze levels. My call has been accurate so far.
Gunne profile picture
@Dalton Hicks
Hehehe...All of them bearish articles haven been proven incorrect.

The cutest idiosyncratic one from another planet #GME keeps coming back, and with good reason too...

June around the corner...Tick Tock.

No financial advice.
Gunne profile picture
Everybody likes the stock, Shorty...give it up...You cannot win this...
Down under again 95% buy... 👍

preview.redd.it/...

Buy to close, or go down.
Pirates take no prisoners... 🏴‍☠️
Gunne profile picture
Borrow fee at IBKR up to 18.03%
Rebate rate -17.21%

i.imgflip.com/...

Last stretch...

giphy.com/...
j
@Gunne How do I find that video of IBKR talking about last years squeeze and the fact that if Robinhood hadn’t shut the buy button off the price would have shot into the thousands?
Do you know anyway I can transfer regular IRA and or Roth to ComputerShare? 5K shares each and I don’t trust
the bank.
If you have any idea it would help greatly. My accountant
said I’m fuk’d
Gunne profile picture
@jbw1937
1) Video from Thomas Peterffy (IBKR)

www.youtube.com/...

2) Go to Superstonk

www.reddit.com/...

Search for "IRA" + "Computershare" or something similar, and you'll find posts about it...

I know very little about IRA or Roth since i'm European.

Retire like drifting Lambos on the moon. 😁
j
@Gunne thanks Gunne
Gunne profile picture
Meet/welcome the new Gamestop COO.

i.imgur.com/...

Bullish AF.

i.imgflip.com/...

LFG.
Gunne profile picture
Down under likes the stock. 😁 🤘
95% buy. Most of them all, naturally.

preview.redd.it/...
A
As predicted it has been crashing day after day, now let us see how low it sinks before stabalizing. I think buying very very small lots at this price of $80 and then again at $65 might be a good idea.
j
@A.Jay 65? Enough to give a old man a tight tits
A
@jbw1937 It is a weak stock. As long as it trades below the $100 level anything is possible.However if it regains the $100 level then all is well.
Gunne profile picture
Told you i will crack you, not the other way around...
This time...a cactus...Rent free plus one Dollar
A
@Gunne Are you still thinking it will go to the moon? Moon is almost out of sight at the moment.
j
@A.Jay red moon last night in Naples, a little after 4am.
Sellers take warning.
Gunne profile picture
@A.Jay
Yep, of course.
Gunne profile picture
Sell-siders....
We are here, and we are plenty

www.reddit.com/...

Dig?
A
@Gunne Let us see how many shares you people can buy and for how long.
Gunne profile picture
@A.Jay

Plenty, and a mighty long time.
k
im adding here. the next squeeze should be around 120 dollars. i bought at 200, 170, 130, and at 80. will need to average significantly to break even.
Gunne profile picture
@karondongotbanned
Give it some time 😉 , not that much really.

Does it look like this crew will roll over, and die?
For who, or whom, or what? The self proclaimed masters of the universe?

www.youtube.com/...
Gunne profile picture
We're here, all of us, longs.
A new dawn is coming.

www.youtube.com/...
A
@karondongotbanned WOW.I cant belove you were buying when you should have actually been selling?$200 and $170 were insanely high prices to Buy, I think you got caught on the wrong foot.
I think $80 is a good level to buy, however I will not be surprised if it falls to $50 level before rising to around $100 which may be its peak for now.
The moon is very very far away.
Gunne profile picture
=>GameStop: The Meme Days Are Over

No, they're not

c.tenor.com/...
r
@Gunne A buy at $20.
Gunne profile picture
@rutleyh
A buy anytime...Cuz we are going much higher, much.
r
@Gunne So far, I haven’t seen anything from you that I could translate into logic. Invest however you wish. I just don’t think you have a plan outside of being a fan boy and are so caught up in it, you can’t see (or accept) what is happening .
M
GME and BedBath&Beyond should merge and cross sell grilling accessories with game consoles.

Duh..no brainer right?
R
GME is in the process of building a unique company. Gaming in huge and GME is set up for the next generation of gaming. So many companies had a negative EPS for a long time. Tesla, Amazon to name a few.
This stock has been bashed by the market, media and analysts on a regular bases. I hope it visits it’s year low, so I can buy cheap.
In addition, there are more shares then the company possesses . It’s called naked shorting.
p
@RomeVVV Amazon has what's called a 'moat'. An electric car company is not all that easy to jump into either. But electronic gaming?
I spend thousands a year at Amazon. I've spent $0.00 on 'games'.
j
@RomeVVV this is cheap. I’m going back for more to pass out to the next generation, first one and two are loaded up.
Gunne profile picture
@261proton
Bezos seems boring as hell though 😜
r
Is Ryan Cohen overextended
Look at the collapse of BBBY
Gunne profile picture
@r cohn
6.2 Million Apple shares, and Gamestop about to moon...

Could be worse, don't you think?
Gunne profile picture
He probably could even use those Apple shares as collateral like Elon the Moonsk did when he bought Twitter, if he wanted to do that.
r
@Gunne
I bring this up because of the action in BBBY .
If Cohen was anywhere near accurate in estimating its value , he would be buying much more at current prices to obtain a controlling interest. Instead the stock can’t catch a bid .
A
The bulls are sure getting hammered black and blue.
j
@A.Jay hi shill: Hedge funds naked shorting so they drive the option winners from Friday to not take stock that they don’t have. They will not be able to keep their fingers in the dyke long. Nice chance to add👍
Gunne profile picture
@jbw1937
Everyone knows what they're up to. Three weeks left before June 2, i think they will move swiftly after that.
k
@A.Jay keeping my hopes up. once GME pays dividend the stock price will go up.
A
The $100 level has been breached on the downside.
How much further will it slide,anybody hazarding a guess?
j
@A.Jay 1200
r
@A.Jay
I have raised my target to 17
j
@r cohn probably all you can raise😁😇
k
LONG GME. bought some today to average to 150 a share. we will experience a run off inflation, which will drive GME up soon
p
@karondongotbanned Basically you are drilling holes in the bottom of your boat, to let the water out.
T
Gunne profile picture
@karondongotbanned
I think inflation will come down substantially when GME starts mooning.
Take gas for example...speculation galore, nothing to do with supply/demand fundamentals, as Russian gas has been flowing like it did before, until very recently, when they cut off gas to Poland and Bulgaria. Minor importers, by the way.

tvc-invdn-com.investing.com/...
Gunne profile picture
Every ape probably be like....I guess i'm going to have to sell now 🙃 😂 🤣

finance.yahoo.com/...
p
@Gunne Why are you citing that article? It basically says 'this is no time to be buying GME'.
It also says 'investors are moving to quality.' To. Quality.
It also says 'If you are a fan of GME I have no doubt you'll be able to buy it for less in the coming weeks.'
Doesn't sound promising...
j
@261proton Quality??
All the high PE are blown up and more pain coming. The shorts are after everything to fund their short positions. Buy the hell out of GME and the others and they stop wiping out American jobs. Hedge funds are done.
A
@Gunne The $100 level has been breached on the downside. Is a further 20% fall on the cards?
It has corrected 50% from the highs of $192 it was trading at in March when I had advised a Sell and the bulls were even then advising a Buy saying it will"go to the moon".
A
As predicted"every upward move is followed by a greater downward slide"the stock has not only given up all its gains of the last 2or 3 days but has sunk lower and is sinking day after day.
M
There are sooo many better run companies that generate actual profits that you can “invest” in for the longer term. GME is nothing but a pipe dream for many who don’t fully understand it’s missing business model.
Gunne profile picture
@Moomoo22u2
Contradiction in terminis.

If it's missing, according to you, it cannot be understood, can it?
Ready to rumble again, hedgies???

Cuz i sure am.

giphy.com/...
p
@Moomoo22u2 Other than the height of covid GME was a nickel and dime stock. The stay at home Robin Hooders saw it doing well at the time and decided it was their rocket to the moon. They bid furiously against each other til the price went to a ridiculous level. Now the company is losing money, but boy the stock went way up before, it'll do it again!

Frankly all I see are people who bet big that it was going to make them rich; they've lost half their investment and now are tilting at windmills to make it go back up.
Gunne profile picture
@261proton
They'll make it back fairly soon, and then 'some'...
It's all in the SEC filings...pretty much from the beginning.

Do the DD.
h
I have owned and lost money on GME shares since the saga began. One of my sons is a confirmed WSB ape and has 118 shares. Registered at Compushare I think, because that is part of the conspiracy theory.
I cannot talk sense to my son. It's always just this close to going to the moon. He's down about 60 percent from his buy in.

i just don't see it. they have a ton of brick and mortar stores that don't earn their keep. the young kids buy their games online these days. so it's always the next hope, the next pipe dream. like NFTs. the only thing is, NFTs are in the downhill slide of the tulip bulb mania they were, and sales are dropping precipitously in the NFT industry.

To me, Gamestop is equivalent to the thousands of Blockbuster stores. They died a fast death because of Redbox, streaming etc. Now gone. GME has cash because they correctly sold (diluted) a pile of shares while the stock was over $200. But what is the business plan, what is the hope? I just can't see a coherent rational business plan here.
Gunne profile picture
@hammerup
With all due respect for your relationship with your son...
He might be mad, but he could be right

www.youtube.com/...
A
@Gunne I think his son is like you, fail to read the writing on the wall." GME is a weak stock which is sinking day after day".
Watch out! if the $100 level is broken then it will sink like a ton of bricks.
Gunne profile picture
@A.Jay
The most important thing is that he's a good dad, for his son.

preview.redd.it/...

It's also important to notice that the younger generations always reflect progress in some kind of way...

See... me, pretty old...am listening to the traditional radio channels, and though these people really try to make a good show, and most do....
the amount of commercials is really getting out of hand...

One listens to the radio to hear music.

So what does this younger generation do=>They turn their back to that, and go with streaming services.

giphy.com/...

I call that 𝙥𝙧𝙤𝙜𝙧𝙚𝙨𝙨.
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