GameStop is a meme. A rallying cry. A cudgel against the powerful. Soon to be a major motion picture based on real events. A veritable religion.
It is also a publicly-listed company that sells video games at brick-and-mortar locations in malls, strip and otherwise, during a pandemic when visiting such places has become much more difficult if not impossible. As such, it must comply with the rules and regulations governing such companies, incredible as that is. This is why it did not take full advantage of its once-nearly $500 share price to sell an unlimited number of the same, and also why this week it will go through the motions of issuing quarterly earnings, and why those who analyze such things will weigh in on them, as if the fundamentals that govern other publicly-listed apply to it.
Wedbush Securities analyst Michael Pachter said it isn’t possible for GameStop’s results to reflect its roughly $14 billion valuation given the issues it is facing…. Analysts expect the retailer to post its strongest quarterly revenue and profit in two years, bolstered by a winter holiday shopping season that included the release of next-generation gaming consoles from Microsoft Corp. and Sony Corp. But some also say the company’s performance should reflect challenges created by the pandemic and long-term industry changes that it has failed to insulate itself against.
“The fourth quarter is generally their moneymaking quarter,” said Telsey Advisory Group analyst Joe Feldman. Still, he said it isn’t a good sign that the company previously disclosed that sales fell 3.1% for the nine-week period ended Jan. 2.
Very good. Now that we’ve play-acted real company, let’s talk about what actually matters to GME: Those $1,400 checks finding their way (however slowly) into the Robinhood accounts of the very bored.
Analysts at Deutsche Bank recently estimated that as much as $170 billion from the latest round of stimulus payments could flow into the stock market. They conducted a survey of retail traders in which respondents said they planned to put roughly 40 percent of any payment they received — or $2 of every $5 — into the stock market. Traders between the ages of 25 and 34 said they expected to put half of their stimulus check into stocks.
“That could lead to a bit more mania, speculation in the market,” said Patrick Fruzzetti, managing director and partner at Hightower Advisors, an investment firm. The “stimmies,” he said — using a popular online term for stimulus checks — will go into people’s trading accounts, and “they will trade.”
Anyway, speaking of religions cosplaying as public companies, the Technoking of Tesla has to pretend to be a normal executive for a minute to assuage concerns that his exploding cars might also be instruments of the NSA.
“There’s a very strong incentive for us to be very confidential with any information,” Mr Musk told an influential Chinese business forum via video link. “If Tesla used cars to spy in China or anywhere, we will get shut down….”
He sought to downplay concerns over companies sharing sensitive data with their home governments, referencing the case of the Chinese-owned video platform TikTok…. “Even if there was spying, what would the other country learn and would it actually matter?,” Mr Musk said.
We don’t know, Elon. We don’t know what “actually matters” anymore. Because you, the chief executive officer of a number of prominent public companies, turned from the above relatively measured and reasonable comments to respond to criticism of your ever-growing wealth like this.
Well, Elon, not every rich guy is as forward-thinking and anti-materialist as you. So here’s what they’re doing with their own expanding bank accounts.
They are one-upping each other in online auctions for jewelry, watches, furniture, sports cards, vintage cars, limited-edition Nikes and crypto art…. “All I do is go through watch porn,” he said. “I’m selling watches, I’m buying watches. It’s crazy. I have no reason right now to buy a watch. I’m at home all day at a computer. Time is staring me right in the face. What reason do I have to look at my wrist? But I want a tangible sign of something, so I’m looking at watches….”
A pair of Conoid lounge chairs from the famed woodworker George Nakashima, which in 2019 commanded around $10,000, sold in October 2020 for $23,750 through the Chicago auction house Wright. A Mesa coffee table by T.H. Robsjohn Gibbings, a British architect whose name is barely known outside of the furniture world, brought in $237,500 in December
Of course, you don’t have to be actually rich to get in on the fun. Instead of spending all of your stimmies on options on a movie-theater chain that’s been closed for more than a year, or a vintage smartphone producer, why not buy a little piece of a watch you’ll never get to actually hold in your hands?
Rally, an Android and iPhone app that sells fractional shares in everything from Rolex GMTs to dinosaur remains, had 100,000 users at the start of the pandemic and oversaw $12 million in inventory. Rob Petrozzo, its chief product officer and co-founder, said in an interview that the company now oversees $30 million of merchandise and has over 200,000 users. According to the company, the average age of a user is 28, and most are male…. “The equities space and the cryptocurrency space over the last couple years created really savvy investors who understand the dynamics of the market, so it’s a complement to their Coinbase accounts and their Robinhood accounts,” Mr. Petrozzo said.
We, as a species, are doomed.
GameStop to Release First Earnings Report Since Reddit-Fueled Stock Rally [WSJ]
Recast as ‘Stimmies,’ Federal Relief Checks Drive a Stock Buying Spree [NYT]
Elon Musk denies Tesla cars are used for spying in China [BBC]
Elon Musk spars with Bernie Sanders over his massive fortune [N.Y. Post]
Here’s How Bored Rich People Are Spending Their Extra Cash [NYT]
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.
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