re: GME Ended at $90.00 today.

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Because they like the stock

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I would love for someone to detail the reasons why for me...

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I would love for someone to detail the reasons why for me...

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Read DFVs DD. He didn’t get into gme for a potential squeeze. He lays out all his reasons for picking up gme.

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Read DFVs DD. He didn’t get into gme for a potential squeeze. He lays out all his reasons for picking up gme.

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GME is actually one is those companies that looks to be in a poor position no matter which angle I assess it from.

From a fundamental perspective, the data show a company in decline, before the pandemic. Furthermore, the reliance on non-GAAP earnings metrics, that show far more profitable quarters than the strait-forward, GAAP earnings, are always a red flag to me, particularly when the company’s business model is pretty standard and not complex, and therefore, doesn’t really justify a deviation from GAAP, let alone when deviation tells a completely different story.

From a broader more secular perspective, a company whose primary business is brick and mortar retail, often in locations (e.g., malls) that are especially struggling, is already facing headwinds. On top of that, it’s not only a retail sector that has already easily shifted into the online market, it’s almost surprising that it’s not completely online as there is very little added value to the brick and mortar model whatsoever. In other words, it’s not like buying a mattress, a car, some clothes, etc., where actually experiencing the products in person before buying is valuable and hard, if not impossible, to replicate online without physically (which has a lot of costs) shipping it to a person. Video games do not have those barriers, and in fact, the opportunity to experience it is probably easier online than in person where a trial version can be sent in a matter of seconds.

Finally, from personal experience as someone who is not a gamer, but got a Nintendo switch for myself and the kids the Christmas before last. And I decided I wanted to buy Zelda in January or 2019, so I went to GameStop at the nearby mall, and I was surprised they didn’t even have it in stock. So I quickly checked online (at the GameStop), and both Target and Walmart had it in stock at multiple locations. Since then, I’ve bought games at Target and Walmart, perused the games many more times at each, and I haven’t set foot in a GameStop in over 2 years now. In other words, even if the “brick and mortar” retail model for games is valuable, it’s hard to see why GameStop is valuable when Walmart and Target can deliver the same products, with potentially a wider selection (from personal experiences), without the added costs of a standalone store, and with the benefit of more easily capturing customers who weren’t specifically looking to buy the products but came across them by accident and/or convenience.

So DFV may have persuasive and logical arguments for buying GME, but I think you could do that with any investment. And it’s not really about how logical and persuasive the arguments are one way or the other, it’s how well the stand up against the counterargument. And in this case, I think the evidence and logic tilt heavily in favor of the counterargument.