Forget GameStop: Buy This Value Stock Instead
Video game retailer GameStop (NYSE: GME) has been struggling for years as malls hemorrhage foot traffic and console games are increasingly bought in digital form. Things were bad even before the pandemic. Comparable sales plunged nearly 20% in 2019, and the company posted a sizable net loss. The pandemic has boosted demand for video games, but it hasn't been enough to halt GameStop's ongoing demise.
While GameStop the business is a train wreck, GameStop the stock is a different story. Small-time speculators on Reddit's WallStreetBets have helped fuel an epic short squeeze on the heavily shorted stock in recent days. Shares of GameStop were trading for as much as $100 early Tuesday morning, up from around $20 at the beginning of the year. The stock's 52-week low is $2.80.
Fortunes have been minted by GameStop's upward spiral, but none of this is permanent. GameStop stock will eventually go back to being valued based on the company's fundamentals. Those fundamentals are not good.
Source Fool.com
