100%+ short interest in GameStock stock (GME) – fundamental & technical deep value analysis

In this video I review GameStop (GME, $4.03, $260M market cap). As of July 2020 I'm bullish on the stock – perhaps foolishly so. What are your thoughts on GME? Do you agree or disagree with my take? What did I overlook in my analysis? Which of my assumptions were off?

There's a lot to cover in a GME thesis. I did my best to review what I consider most of the important items. As time passes I'm sure I'll realize I forgot to discuss something important. I'll update this description with such updates.

One item I failed to mention is how management could use GME's rising cash balance to repurchase the remaining 2021 bonds on the open market at a discount; the bonds currently trade at ~87 as of July 2020. It's possible the discount would vanish if they attempted to buy back the bonds in size, but it's still a scenario worth mentioning because such a move would marginally increase its value per share.

Another glaring omission is Scott Preston's GME piece in Barron's from February 2020 – I can't believe I forgot to mention it. It's one of the best articles written on the company and a must-read for anyone following the story. In particular Scott does a terrific job walking through the different ways GME can reinvent itself. The article is here: https://www.barrons.com/articles/gamestop-stock-can-quintuple-within-two-years-portfolio-manager-51581535869

Resources mentioned in the video:

Furey, Edward "Present Value of Cash Flows Calculator"; CalculatorSoup, https://www.calculatorsoup.com - Online Calculators

Hestia/Permit Restore GameStop presentation May 2020: https://www.sec.gov/Archives/edgar/data/1326380/000092189520001510/ex1todfan14a12166002_051920.pdf

Scion 13D April 2020: https://www.sec.gov/Archives/edgar/data/1326380/000090514820000491/efc20-335_sc13d.htm

Scion June 2020: https://www.businesswire.com/news/home/20200603005929/en/Scion-Asset-Management-Voted-Support-GameStop%E2%80%99s-Board

SeekingAlpha GME Articles: https://seekingalpha.com/symbol/GME/analysis

Statista: https://www.statista.com/statistics/190225/digital-and-physical-game-sales-in-the-us-since-2009/#:~:text=In%20contrast%2C%20only%2017%20percent,were%20sold%20as%20physical%20copies.&text=The%20digital%20gaming%20industry%20is,The

The Verge – Xbox Series X optical drive: https://www.theverge.com/2019/6/10/18659800/microsoft-xbox-project-scarlett-optical-drive-console-e3-2019

Xbox 2013 blog update: https://news.xbox.com/en-us/2013/06/19/update/

Variety – Death of Physical Video Games Exaggerated: https://variety.com/2019/gaming/features/physical-video-games-death-disc-digital-1203207513/#article-comments

GamesIndustry.biz – AAA game downloads: https://www.gamesindustry.biz/articles/2019-06-07-aaa-game-downloads-on-the-brink-of-overtaking-physical-in-europe

GamesIndustry.biz – GameStop's concept stores: https://www.gamesindustry.biz/articles/2020-02-24-gamestops-concept-stores-a-laboratory-not-a-hail-mary

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