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GameStop's (GME) Disheartening Quarterly Report

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GameStop's (GME - Free Report) , the prodigal son of retail equities amid the retail apocalypse, saw its shares dropped off a 10% cliff out of the gates Thursday morning following a rather disappointing earnings call the prior evening. GameStop missed EPS estimates by a mile, but the biggest disappointment was its lack of guidance regarding its ostensibly ambiguous "transformation" plan.

However, this rational morning dip was quickly bought up by the seemingly irrational cohort of r/wallstreetbets (WSB) traders (though they did utilized its 50-day moving average, which became a technical support level). This group of nostalgic market-moving traders drove GameStop up thousands of percentage points this year, allowing the firm to raise over a billion in cash through seasoned equity offerings. However, as of now, it looks to be burning a hole in the company's pocket, with an inability to turn a profit with its current business model and no guidance on a new approach.

Ryan Cohen, the 'visionary' activist investor with aspirations to drive growth back into this antiquated retailer, is yet to show investors how he plans to do so. With no plan in place, GameStop may run out of money before any operational shift can even be made. I would steer clear of this gambling apparatus.


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