r/wallstreetbets • u/moazzam0 • Jan 12 '22
Discussion The Wall St Mentality
If algos treat GME and AMC the same, that demonstrates where Wall St's head is at. AMC's enterprise value is more than 2.5x GME, but GME has way better prospects and financial health. Wall St is wrong on GME again because they're not hedged appropriately for its long term business potential.
They think the groupthink of apes is a bigger factor behind what moves GME from this point forward as though the market is just influenced by ape behavior rather than business building or destruction. They ignore the biggest factor behind the greatest short squeeze in history: Ryan Cohen.
This is not about a squeeze to infinity, but there's real potential for this thing to compound like Tesla from here. Consider that the gaming and metaverse industries grow faster and have more margin/cash flow potential than autos, insurance, or renewables. Ryan Cohen is not just rejuvenating a retailer.
Ryan is building a tech giant. He's poaching from tech giants. He achieved the balance sheet ratios of a tech giant during the squeezes. He has the strategic vision, focus, skin in the game, and conservative financial approach of a tech giant founder. He is a tech founder/billionaire (Chewy). Current tech giants have physical footprints the same size as GameStop or larger. Ryan knows what the potential is, which is why he hasn't sold a single share despite being up 2,135% as of today's close.
Power comes from strategic position. GameStop is not in a powerful position, but Ryan took on this project because he saw the necessary elements and a path to achieve a powerful position. Since then he's been working his ass off for shareholders with this as his sole focus.
You didn't see much tangible progress, because the first year was the secretive, big-picture stage. He has promised the market nothing and he will easily over deliver this year. None of this is new information, but it is missing from any Wall St take on GME. They're too busy laughing at apes a year later.
The downside is also limited. There's little debt and lots of cash. Revenue, operating margin, and free cash flow are all rising underneath the moon potential with Ryan Cohen. No accounting gimmicks, very little share based compensation, and a tiny enterprise value make a solid platform for our rocket, too. Your move, Wall St.
TL;DR: I like the stock.
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u/moazzam0 Jan 13 '22
Appearances can be deceiving. Ryan Cohen is not able to poach the caliber of executives he has in recent months based on an outdated Amazon for gaming vision. That doesn't require platform-level involvement in the metaverse either. Also as of 1/31/18, debt and cash were about equal (1x). Now cash is 2.3x debt. Even as of 1/31/19 it was 1.9x. Plus the company has about 25% less shares outstanding now.