Approaching The EndGame(Stop)

Highlights

• Common comparisons to defunct retailers lack important context.

• Current catalysts for shares are numerous and significant.

• Any upward movement could trigger a vicious short squeeze.

Brief Commentary

Before it became a meme, GameStop was trading for a valuation less than the cash on their balance sheet.  The stock was shorted over 100%, despite the fact that a console refresh cycle seemed poised to result in a significant boost to earnings. While the Covid-19 pandemic and resulting supply chain pressures depressed results, Ryan Cohen identified catalysts similar to those in this article and took an activist position, eventually becoming Chairman of the Board. The rest is history.

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