From Nasdaq: 2024-05-22 09:15:00

GameStop’s share price surged by 70% after “Roaring Kitty”, Keith Gill, posted on X for the first time since June 2021. Despite the hype, GameStop’s fundamentals remain weak with a market cap of $6.8 billion and enterprise value of $6.2 billion, leading to an accumulating deficit and poor quarterly performance.

In an attempt to raise cash, GameStop plans to sell up to 45 million shares, diluting current shareholders by 15%. This move follows a 70% jump in stock price and a preliminary report indicating a significant decline in sales. The lack of a turnaround plan and continued cash burn signal trouble for the retailer.

Ryan Cohen, GameStop’s savior, now holds the responsibility to invest the company’s cash hoard. With $1.08 billion in cash expected at the end of Q1 2024, investors await Cohen’s moves. However, the decision to invest in other stocks raises concerns, making GameStop a risky investment under his leadership.

Read more at Nasdaq.: The GameStop Trap: 3 Reasons GME Stock Is NOT Back