Meme Madness Special: How retail trading shook up Wall Street

[Music] [Music] [Music] [Music] [Music] [Music] do [Music] [Music] [Music] [Music] this was a four dollar stock folks six months ago so this thing has come quite a long way there's a two-year chart of amc i mean look at that thing this was a cryptocurrency that was created as a joke based on that doge the cute shiba inu meme reddit is saying hey just because you guys have cfas and wear vests and go to an office in midtown doesn't mean that you're the only ones who can understand what's happening i'm the voice of reason the fundamentals are just in no way on some of these companies justify these valuations may not be tomorrow but rest assured it will absolutely end very badly for the traders trading these stocks getting reports this morning from people who use robin hood in particular that basically it's not allowing people to put on new positions a relatively small number of stocks have gone uh viral and we have to have a prudent risk management and that's what the firm did and even though this is a financial services committee there are very few people on that panel who are going to truly understand what's going on i'm not a cat i'm just an individual whose investment in gamestop and posts on social media were based upon my own research i mean sazi is are we ever going to be at a point in our lives when we don't check in on gma every so often no it's uh it's a trade that we just can't uh we can't shake and five months later we are still talking about gme amc and all of the names of course that have been a part of the meme trade over the last several months but you know i was watching that montage last night when our producer sent it over and i was really struck by those comments hearing keith gill roaring kitty also known as debuffing value on wall street bets talk about his thesis and you know there was a time back in january i spent hours watching his youtube videos breaking down the fundamental case for gamestop and i think what's so interesting guys as we sit here and take stock of what is a meme stock how do we get there how do we define it what role do they play in the market you know julie this began as a very simple hobbyist investor who knew what he was talking about looking at a single name and saying i think this is undervalued and i think almost everybody who gets involved with this says at the end of the day i do care about fundamentals and we can debate the stock price but the underlying business is something that a lot of people who are at the beginning of this trend are still keeping in touch with and you know there are a lot of keith gills out there that's something that's been sort of fascinating to me too there are a lot of these amateur investors who have youtube channels who have followings of varying sizes right who try to make these kinds of recommendations in these kinds of cases and just like it's a little bit of a mystery why certain things go viral and certain and other things don't it's a little bit of a mystery why gamestop is the one right that initially caught fire here and then spiraled out of control one could argue um and then inflamed the meme stock trade generally and one of the conversations we've started to have here is how does this happen right what defines a meme stock how does something get to be a meme how does it catch the attention we know wall street bets was the sort of breeding ground if you will and continues to be the breeding ground for these meme stock ideas um but miles you sort of came up with some criteria sort of casual criteria or commonalities if you will between some of these meme stocks um that you know it's not sort of hard and fast rules but it does seem like they they do share some things yeah there are a couple ideas and and let's bring up the full screen that i think we made here that has sort of the four criteria that are in general like things that that tend to go into to a meme name and size i'd love to get your thoughts on these i think the first one is actually the most interesting to me because we all know that the value of a business doesn't require that it's per share price trade at any price right amazon's at 3 000 and you know ge's at 14 or whatever it is and uh between there there are all kinds of different stock prices i mean let's take a better example apple's at 130 or something amazon is at three grand per share but the value of both businesses is about the same but it does seem that meme stocks tend to begin with stocks that have a low per share price also tend to be smaller companies market caps usually under about 10 billion oftentimes even smaller than that but you know as we were kind of screening this out under two it's mostly small little biotechs under 10 you have you know names like nicola fit in there clover fits in there root insurance smile direct some of these names that are again heavily shorted but have gotten uh pretty interesting to retail investors as time has gone on short float we're going to get to that uh with ihor dussinowski of s3 in just a bit usually 15 or more we've seen what those numbers can be with gamestop and then sazi something i know that you continue to be interested with especially in the amc gamestop trade these are names people know people know amc theaters people have been to gamestop retail locations and that is absol and wendy's earlier this week that's absolutely a part of how these names get mimified on wall street bets because people know the brand oh right now miles and i'll add even a bonus one to that list i would say fomo fomo is another good qualification for a mean stock what does that mean fear of missing out and it's these companies where like a game stop you have really hardcore believers still in the name even after the stock sell off post earnings there's this week you have that hardcore group of intense uh entrenched traders that believe in a ryan cohen they believe in a new vision of gamestop whatever they might be they may have it cooked up on their whiteboard at home while they're trading whatever it is they believe in it and they are able to articulate their views or that belief to a whole trading a whole new trading community online that may not be spending many hours reading financial statements but uh they're on the trading channels debating about the future of the company and they're able to get one another believing in the outlook for said company but i also note this too guys you know as a former analyst i've just been amazed to see some of these moves and how the stocks have completely disconnected from fundamentals and i think it's caused a lot of wall street analysts to go back and rethink how they are calculating fair value for stocks and in some cases if they can't come to terms with this new type of trading environment this two new type of analysis they have just dropped coverage on on a gamestop they've dropped coverage on an amc i know we'll talk to an analyst later who covers amc his price target on it is six dollars uh so very interesting to see or i'm looking forward to talking to him about why he has that price target and how he's thinking about analysis moving forward yeah uh 62 dollars there is is is chad bynan's uh price target on amc analyst over over mcquarrion and i only mentioned it on the program yesterday but uh we got a lot of no's from analysts who just don't want to play ball with this stuff size you know they did they this doesn't fit into how you build an analyst model sell side model to give to your clients and they want nothing to do with talking about these names especially not with the media on a public-facing forum like this but we talk about the meme names and i think part of the reason that the trade endures is because people have made a lot of money on a lot of these names earlier in the program julie hyman called jared blickery the master of levels he's also the master of data here at yahoo finance and pulled for us the performance from some of these major names jared and how do you see it as you look at some of the main players here the main characters as it were and and what the stock price for them what the stock returns have been for folks who you know maybe got in at the beginning of this this whole saga yeah we don't need uh fundamentals or any wall street recovering analysts out here because we have technicals and we're going to go over some charts now some of the bigger names a few recent entries and let's just check out the wi-fi interactive here where we have the giant swings in meme stocks and we can see we have gma here gamestop amc uh amd that kind of erupted this week bed bath and beyond uh space that's virgin galactic wish uh context logic and also wendy's and if you look at some of these gains here this is the biggest gain year to date for gamestop 2470 that's how much it was up in uh late january early february we'll take a look at that chart in a minute but here we have biggest drawdown guess what gamestop uh got cut by 92 percent i mean those are that's bitcoin volatility right there and then the current gain or loss here to date is 1072 percent amc here putting up even more impressive numbers you can see it was up as much as 3 325 biggest draw down 45 percent that's kind of a staple here and then a current gain year-to-date excuse me current gain year-to-date is 1920 and we can go down the list here the gains get a little bit less impressive especially for some of these late climbers and we even have a few losses most of the meme stocks as i'll show you are actually up on the year and so i find this pretty uh interesting that context logic was actually down 41 percent and all these are measured uh from the beginning of the year so let's take a look at some of these uh some of the technicals here and we can see here we have amc now remember there was a 45 drop and this looks pretty small on your screen but in real time this would have looked something more like this peak right here and we can see we're off about 40 45 again from these highs so this is a pattern that could repeat i'm not saying that we're gonna go to uh the moon here but we definitely could consolidate and as long as we stay above certain key levels that gives the market the ability to make further gains just checking out gamestop here for a second you can see still up over 1100 percent here's that famous high and you can see pushing up against those march levels right now guys yeah fascinating charts to look at and jared as you know the longer that the um chart doesn't get completely annihilated you know you see gamestop consolidating in the mid hundreds and 200s there the more constructive it gets for some of those long-term shareholders uh as we as we kind of roll forward we're going to talk to one of those folks who's been involved with the name since 60 dollars individual investor over in scotland he's been in since 60 and we'll talk about what his long-term vision for the company is well another part of this meme stock saga the initial kind of scandal around it was not only what was happening on robin hood's platform with you know some of the names going down the platform kind of breaking on a daily basis but also the hedge funds that had been betting against names like gamestop and the law says that they had been suffering we saw the short interest in some of these names exceed the entire float at one time very uh odd things going on within the market and a company that was really at the center remains at the center of tracking all this is s3 partners and joining us now to talk about where things stand with some of these meme names igor dusanewski joins us he is the managing director of predictive analytics over at s3 so um ehor we just got reports you know the last couple of days that melvin capital who is at the center of this continues to take losses on some of their positions but as you guys look at the data on short interest related to a lot of these hot names um is it still elevated are people still out there trying to take the other side of this or has everyone been scared off by you know some of those grizzly numbers that we saw back in january and february yeah hi thanks for having me and you know you're right there is a lot of short covering a lot of these days because the losses have just been so big on the short side uh we see gamestop down over six billion games on short sellers down over six billion dollars for the year amc short sellers down around four billion dollars for the year in market to market losses so you know what there are a lot of shorts that are getting out of their trades uh especially in amc recently we've seen uh some 29 million shares covered over the past week and you know that's over a billion dollars of short covering so you know when you talk about meme stock kind of hand in hand goes short squeeze and that's one of the one of the things that the the long shareholders retail shareholders are looking at some of these names er someone that has been covering this so closely how would you defi define a meme stocks i think you guys hit the nail on the head with you earlier uh talk about what is a meme stock uh when i uh look at uh you know our data and down on the street i really look at the total short interest i'm looking at recent profit and losses on the short side because that volatility of pricing really does affect the how the retail traders trade on this name if they're seeing a lot of activity and uh and upside uh moves they're going into the name stronger because you know this is kind of a social thing where uh you know it's retail versus institutions so as the stock price goes up you know the the idea that the hedge funds are taking losses is actually putting fuel on the fire but i am curious if you can sort of suss out through the data if that is in fact still true because there's also this line of thinking that you know there are now a lot of hedge funds on the long side also that are trying to profit from this is there a way of seeing through the size of trades for example what's retail and what's institutional here yeah when i see half a billion shares traded a day i i'm looking to myself and say well that's not retail guys alone you know there's a lot of institutional guys that are day trading during these uh market uh volatility and and you know making money you know intraday you know buying and selling stock because you just don't have that much that many assets on the retail side to make up that trading volume so we are seeing a lot of institutional longs playing alongside this because you know these guys are smart they realize that you know some some names are fundamental based some names are more momentum based and if this is a momentum based name then i need to trade in that in that way and basically you know go in and out of a name as as uh prices move and tacticals show me how to trade it yeah and and igor finally just thinking like longer term what this means for the markets you know short squeezing is not new in any way shape or form that has been around for a long time in the market the way that retail has jumped into this is a new development but do you think that this changes the calculus around people seeing short interest as an opportunity is it something that's more exploitable for institutions less exploitable and you know how does this you know maybe in your view play into just just the data sets that people go through um to try and find you know ideas going forward right i mean the name that surprised me this week was wendy's it doesn't have a huge amount of short interest yeah and and i saw that it was turning into a meme stock and i figured that you know this might actually curtail it and kind of fall off the map just because there aren't that many shorts in the name it kind of misses out on the high short interest uh uh piece of the puzzle uh what i do see is uh more and more longs and shorts looking at the short squeeze potential of a stock and they're they're trying to see is a short crowded and you know is there a lot of short interest is it tough to do a stock borrow is it tough to get a locate uh is uh is trading volumes you know not not support the amount of short selling in the name you know overall you know if you're if there are you know 10 million shorts in the name but trading volume is you know a million shares a day well you know this is a crowded sock you can't get in and out of the name and that's why we created a crowding score and a short sweet score that is basically identifying to both long and short investors what stocks have the propensity for being squeezed and what stocks are crowded on the street and i think these are names that people are going to be investing in both the long and short side because this is a momentum market in a lot of these stocks um and then you know without opening a whole new can of worms certainly the the way that stocks are owned now with um etfs versus active individuals and what stocks are available for borrow and as you look at the market has that changed some of those dynamics around how easy it is to cover position find a borrow and get that done at a reasonable price most of these stocks have are borrowable so you can't get a locate and you can't put on shorts and there's certain stocks like uh clover which is is getting uh you know a little more difficult to borrow at times um we've got uh most of the names that are that are able to short to get in and out of a trade well yeah you're right if there's a lot of institutional holders it means that there's more lending ability in the name and that means that shorts can get into the name so you know a stock that didn't have a biggest future holding before this meme stock uh it became a meme stock and now does actually helps the shorts get into the stock right right because uh yeah you wanna you wanna know why your fees are so low on some of those etfs well uh we're finding out some of those some of those details on how people make money around the edges of their portfolios with all this stuff all right uh ihorn thanks so much for jumping on the program today ihor dusanewski managing director of predictive analytics at s3 partners coming up on the other side of this break we'll continue our discussion of the meme names we are going to talk to the founder of the wall street bets forum that has certainly taken a different direction since he began that conversation on the message board several years back we'll talk to jamie rodzinski on the other side of this break [Music] [Music] [Music] [Music] [Music] [Music] do [Music] [Music] [Music] well we turn now to the reddit forum which as we talked about earlier sort of birthed many of these meme stock ideas and still is even today we want to bring in the man who founded that although he's no longer associated with it jamie rogozinski is the founder of wall street bets the forum on reddit and jamie um talk to us about your thinking about the forum now what it has become and sort of what you first intended it to be versus now well first off thanks a lot for having me and uh what started off as a forum for people to get together and discuss these high-risk trades has has carved out a space for them in the market so that they uh it's grown so much so so the individuals collectively collectively make a participant in the market that's the same size as a hedge fund and uh and equally as clever as the hedge fund a lot of times there's a lot of talk about how the retail investors they don't know what they're doing whatever but time and time again they've proven to be able to spot these inefficiencies and jump on them you know i noticed a lot of talk about these short squeeze and that's what they're going for but if you really look back at what the types of things that they're doing they're looking for inefficiencies in the market and they're looking to profit from them they've been doing that for several years well and you know jamie we were talking earlier about uh keith gill and you know this all started the game stop saga at least you know as you kind of trace it back and he wasn't the only person who circled this idea but yeah you watch keith's videos and he obviously has thought about this name he knows what he's doing and i guess as you look back at you know the beginning of wall street bets and go way back yahoo stock forms and all that there's you know there's certainly pumpers on that stuff but i feels like ultimately you know the the forum was stood up as a way for people who knew what they were talking about but maybe weren't working at a hedge fund to discuss ideas in the market and that maybe what happens today on wsb isn't isn't quite exactly you know how you how you'd hoped it would be back in the day no i mean it's turned out into something better right you have now a a collective of millions of market beta testers on the actual stock market and making it more efficient and making it more productive right like before gamestop made it really famous we had a lot of incidents one incident where a guy took out infinite margin right or the free money cheat code as it was called where he put in five thousand dollars and he discovered this this oversight by the broker and basically ended up getting a massive amount of buying power right obviously we're able to address that uh with regards to being able to move prices around uh i noticed you had virgin galactic on there earlier virgin galactic was actually on the radar uh january ish of 2020 when uh they made the cover of businessweek magazine because they were doing a different maneuver called a delta squeeze or later a gamma squeeze right this is a maneuver with stock options that's able to really leverage the big money from the the large funds to be able to push the price up more uh easier right but then you have situations where you have so many people coming in they're making so much volatility that the the brokers broke with robin hood having to stop uh trading gamestop as well as many of the other brokers right but now that's being addressed as well right they're talking about the settlement dates and last i saw the sec was also looking at changing the incentives for these payment for order flow companies so every time these guys get together you know they find a way to profit and they they do and and then the system has to kind of catch up and they have to plug in these inefficiencies and make the whole thing better jamie what we're seeing in some of these stocks amc blackberry you name it is that market manipulation i mean what's market manipulation you have people that are buying and you have people that are selling right like if you have a fraudulent intensive somebody that goes up there and lies and says oh blackberry's got this new hologram cell phone that does whatever and it's a lie that's market manipulation and that's fraud and it's illegal etcetera right it's really clearly defined if you work for a company and you're starting to promote it without disclosing it or if you have too much ownership more than i think five percent of the stocks then blah blah blah there's really clear regulations but people coming together and say let's just push this price to the moon and being really transparent and there's no defrauding taking place that's absolutely what the market is all right jamie um really interesting stuff about what continues to go on here and those market opportunities that people are taking advantage of jamie rokasinski was the founder of wall street bets thanks jamie we are going to take a quick break when we come back we've got a special yahoo u edition this week on stock issuance with companies like amc taking advantage of their status as meme stocks to do so we'll be right [Music] back [Music] this [Music] [Music] [Music] so [Music] all right welcome back to yahoo finance live as we continue to explore the world of meme stocks and something that has come up as we have seen a number of these stocks go significantly higher in price is the pressure it does or does not put on corporate management to issue additional shares brian chung joins us now for a special edition of yahoo you exploring the world of stock issuance while class is in session and today we are talking about stock issue and so if yahoo 101 is all about ipos that means yahoo 201 might be about secondary issuance or stock issuance after a company is already public and we saw that this became an issue with amc when we were talking about obviously the new stock that it had authorized in april but actually sold last week so let's explain the pros and cons of issuing new stock if you are uh using a theoretical company and wait a minute is that is that yahoo finances miles upland over there i mean turns out he has a shoe company and it's public already now he's got a million shares outstanding right and he wants to raise more capital to let's say expand his summer barbecue sneaker line so he's going to try and sell a hundred thousand new shares now these two shareholders and miles shoes let's call them julie and brian here they're not necessarily happy with this decision because when a company issues more shares that's going to increase the number of stakes in a pie that's still the same size so if the new shares also have voting power one effect of this is going to be that brian and julie will have less voting power because their portion of the overall outstanding shares got smaller now the bigger deal is that second bullet point there right the earnings from miles shoes are now divided up among more shares which means that brian and julie are entitled to fewer earnings in the company since they have to share it now with more people and this by the way is called dilution like when you water down a drink now for miles this may be the cost of doing business so let's say this is where shares of miles shoes have been trading over the last uh six months or so now if he sees that his stock has been going up which has been the trend in june he may say well okay now is the time to cash in and that's because if he's gonna issue a hundred thousand shares when he's trading at you know sixteen dollars for example which is close to where it's trading right now that's gonna net him more money than if he issued the same amount of shares at the beginning of the year when he was trading let's say at nine dollars right so what happens to a stock price after a secondary offering again miles hasn't necessarily done this yet what should we expect well generally the price is going to go down because of dilution as i explained right shareholders see a little less value in voting and also just earnings per share now again i said generally but let's say there's another company okay a company that's different a company that's built different i'm talking chung's shoes different okay so i'm a shoe manufacturer and i'm gonna try to pull the same maneuver here right i've got a million shares outstanding i'm gonna do the same thing issue a hundred thousand new shares and the question is what's different about me the difference is i am a meme stock so shares and chung shoes have been rocketing to the moon and i'm thinking about this the same way that miles was right i'm gonna cash in when my stock price is high as you've seen in june now the difference is that my stock is 31 times where it was in the beginning of the year and that is showing no signs of stopping and all fundamentals have fallen apart at this point which means that the standard rules don't apply now people are going to recall from previous yahoo use that chung shoes was in trouble in fact we were considering filing for bankruptcy but the meme surge has actually helped me here and that's because now i can raise capital which means my balance sheet might actually look a lot better now so there's a fundamental story there but the idea is that my esteemed retail shareholders let's say it's still brian and julia in this case they didn't really care about the fundamentals to begin with right they didn't expect my stock to go up 31 times anyway so even if post stock issuance my stock now goes down to let's call it 29 times their original investment they'll be fine now one important sidebar i want to point out is that stock issuances don't come from nowhere you look at this amc perspective so this is the real world application here notice the language it says they authorize the right to maybe sell from time to time up to 11 and a half million shares and this is important because it means that a stock price might already reflect dilution even before the company actually issues and then sells the new stock but either way guys the meme stock phenomenon just really shows how traditional dynamics which is something that's usually as cut and dry as just issuing new stock are different when there's to the moon mentalities in retail traders and by the way i want to close off by saying julie and bryan will be receiving a free pair of shoelaces for their service and sending brian's chung chung shoes to the moon but that wraps up this week's yahoo you guys well they get new shoelaces and all my shareholders get is a little bit of dilution but look i'm i'm comfortable with the fundamentals of the business clearly that's a nice-looking stock chart we're seeing you know margin expansion we're really exerting operating leverage on our model as the economy recovers and people go back outside and restock their classes value guy over here value look you uh you have a much more challenging story to tell your shareholders as they look at that kind of stock price action and and try to figure out what's real and what's not in the world of chung's shoes all right brian chung thanks for stopping by for a very special edition of yahoo well as brian mentioned companies have been faced with this question of what to do about their share price becoming a meme their share price divorcing from what those executives believe are the underlying fundamentals of the company we've talked to a couple of folks on this program about this conundrum what this has actually forced people to do in that first round was go back and look at the fundamentals of our plan and the upside opportunity of this business the reality check that we are going to deliver at 850 million dollars plus bieber within a three year period that we have a great balance sheet we have an incredible team and we have a great strategy and i think when people did that those stocks really balanced out very quickly and we became differentiated so as i said these moments don't distract they don't define us but we consistently focus on that sequential growth if we think that the stock price uh presents an opportunity to buy some of it back that's what we'll do but we're not dependent on that stock price at any given moment to make an acquisition or invest in our business because of the the cash that we're able to earn and so it does give us the opportunity to sit back a little bit and not worry about the day-to-day trading of the stock now and i want to point out here guys the first clip that was mark tritton uh bed bath and beyond ceo he came on with us while his stock was exploding he came on as soon as he started talking the stock went up uh from being up about 35 to being up close to 50 percent uh which is just mind-boggling and really the only thing you could probably do as an executive as a ceo is just sit back and watch this if your company is fundamentally solid rocket company great balance sheet has been partaking very well in the housing market recovery rebound uh you have bed bath and beyond turnaround story great balance sheet there's not much you can do uh on the other case if you're a struggling company you take the route of amc ceo adam aaron you go out there and you sell a lot of shares and you fine tune or add more cash to your balance sheet but i will note this too as well once you are mean stock miles and julie it appears that you will always be a meme stock uh so wendy's was included for the first time in this list first fast food company to be uh branded a meme stock stock has cooled down a bit here but you never know when the crowd is going to go back and chew up a lot of wendy's shares out there on the market yeah i don't know when you have one like a palantir maybe or american airlines those sort of got me me and i feel like they've fallen off the radar to some extent for some of the the meme the memers um i do want to bring it back though to john chambers comments in the last hour because we asked him ask a long-time ceo you know what would you do in this situation how do you think about whether you would issue stock or approach this and he talked about thinking not just about president shareholders but about future shareholders as well and sort of the implications for them and for the value of their shares um which is interesting here because you know in the case of an amc the shares went up but then they didn't for a few days and then they resumed their rise so you know obviously it's difficult to predict even at the best of times let alone when your stock is a meme what the shares are going to do but miles i know you also found his comments interesting what he had to say in answer to that yeah and i think look the more that i i think about this and i'm just keep replaying our conversation with uh jamie rodzinski you know back and and he's of course the founder of wall street bets and he made a point that i think um i've certainly forgotten about in this latest meme saga and we're talking right now about what are the implications of what's happening today but the impact that wall street bets and that community has had on markets this was beginning before the pandemic and this was something that folks were beginning to grapple with more often i mean we can go back to valmageddon of 2018 and sort of ask about was was a big retail bet on short ball uh or or i guess on longvale in that situation you know is that part of that market disruption and i think the answer is is probably something a little more than zero percent and so we have all these interactions and i think the real takeaway is that the market has changed the character of the market has changed who plays in the market has changed and as a result of that i think as we're seeing you know executives struggle with a little bit here how they think about their shareholder base is going to change must change over time and the things that that shareholder base will tolerate versus a more traditional shareholder base certainly going to be different um even if as brian chung outlined it's the same shareholder in both companies but for one company they're allowed to issue stock and for others they're held to a little bit of a different standard all right coming up on the other side of this break we're going to talk to one analyst who is covering amc and trying to make sense of how you break down and explain to clients what the fundamental case is when the stock price has become a meme we're back with that red for this [Music] [Music] so [Music] [Music] [Music] so [Music] [Music] [Music] [Music] all right welcome back to our mean stock special and we've talked a lot about what makes a meme stock who is shorting the meme stocks how you think about the meme stocks well let's talk to someone who actually owns shares of a mean stock specifically a sizable position in gamestop tashiraku mirage joins us now he's a college student studying math and stats at university up in edinburgh scotland to cheer thanks so much for joining the program today let's just start with um where you're at with with gamestop your thinking on the company just came out with their latest quarterly results last night what got you involved in the stock and do you remain involved as we sit here chatting today yeah so i initially invested in the stock back in january and since then i've only seen positive news coming out from the company obviously as you were mentioning before the break uh the shares have been issued uh we've tried been we've been trying to raise capital that kind of thing and we see that the meme stocks have now you know they've kind of got somewhat of a fundamental backing with the issuance of shares and kind of the raising of capital we see new players coming in so we see uh you know i don't know we see the new ceo coming from uh amazon we see uh people coming in from google that kind of thing and are they gonna come in to a failing industry into a failing retailer no we're looking at a company on the brink of a potential turnaround and i think that many people are labeling it as a meme stock when there is a fundamental backing to it five years from now what do you see gamestop doing what does that company look like i think that we don't really know where the future of gaming will go for example i think it's a big industry but i think it's a growing industry and i think that gamestop has the potential to be a major player in that we've seen rumors of things such as nfts uh um for gamestop and that kind of thing and we don't know where the company's going with it but i have faith in the man ryan cohen and his uh vision for the future with gamestop the shira it's julie um i'm just curious have you ever been in a gamestop i've not been in the game stop um i've never bought anything from a gamestop like online i'm actually wearing a gamestop t-shirt at the moment which i um got someone to buy from from one of the stores in america so i think that the fact that we have uh you know die-hard fans you might call it of the company um so me coming from the uk willing to buy stuff from the store shows that this whole thing has become some kind of a marketing um or some kind of it's given a boost to the marketing you could say and they've actually um you know used this whole thing to kind of further their sales further uh the company in general and we see a potential a major potential for this e-commerce transition in the future you know this year i'm curious you know because you're not that much younger than us but enough younger you know when i when i was your age it was financial crisis times and everyone hated the market and it was a big conspiracy i'm curious how you and your peers talk about financial markets and you know what you think this means if anything about the state of capital markets like is everybody aware that it's just a casino and you take your bets and you hope to make your money and go home i mean how do you talk about it you know when you're you're sitting there having a pint and just you know not worrying about what gamestop is doing you know um if you asked me this question last year i think it would be very different but i think the emergence of these kind of meme stocks has uh you know influenced a lot of younger people into researching into the stock market i myself looked into it um maybe a couple years ago so i'm not really well kind of a beginner but not not as new as some of the people we see investing um but you know this whole saga has brought a new audience into investing and i think that that in general isn't a bad thing it's a good thing and the fact that we're straying from fundamentals and moving more towards you know a psychological market although it was there before um we're you know it's interesting to see what will happen in the future with the stock market and i do see a lot of people uh talking about it a lot more nowadays i'm very interested in not only yourself but also the your crowd and the other folks in your community that you do trade with or you do talk about ideas with how can we help you you know the fact is this meme stock movement has not only changed investing it has changed our job uh day to day and how we report on things what would you like to see from us how can we help you um i think that sometimes media kind of glosses over what happened so we see for example back in february um the move of gamestop was attributed largely to um was it ryan cohen tweeting or something like that and it was seen more of a joke rather than like an actual play whereas at that point i was looking at the fundamentals of the company seeing okay ryan cohen has taken a major role in this we can also see like other things happening some stuff which none of us will understand what's going on really with the stock we can see it going up and down it's very volatile uh i think that portraying reddit investors as kind of dumb money is a discredit to a lot of them because uh we read investors come from a variety of different backgrounds and a lot of those people investing in these stocks will actually have a lot of big knowledge on the stock market and the goings on behind it so that's one of the things which i'd say uh the you know news could focus on and uh this year before i really appreciate the time um have you have you sold any shares at gamestop and do you have you thought about an exit strategy from from this position um so back in the beginning in january i initially invested for the short squeeze and at the beginning i was selling and buying it uh like for you know just for for a quick profit but then uh as i learned more about the company and as i grew more confident in this investment uh that's when you know i stopped selling i kind of accumulated more shares so there were three main points where i bought in one before the initial squeeze in january uh so i bought in about 60 dollars uh two once the price dropped down to about forty dollars and three once i saw kind of the apex of you know the ascending wedge which was forming on the charts so both a you know a squeeze perspective a fundamental perspective and kind of a technical analysis perspective uh that's the three reasons why i invested and for now i've uh kept on accumulating shares and i will be doing so in the future if i have any money left but yeah so i've just been buying just been adding to my position because i do see a good future for gamestop and the large potential for a short squeeze um as we've been seeing people posting in reddit about that all right there we go i really appreciate the time to shirakumaraj uh student at university up in edinburgh scotland uh tashira thanks so much for joining the show best of luck to you and uh hopefully we'll check in on your progress with this position as the years go by all right coming up on the other side of this break a lot more on meme stock coverage plus how an analyst can possibly make sense of what's happened in amc we'll discuss that coming up right after this [Music] [Music] so [Music] [Music] [Music] [Music] [Music] this [Music] when we were just talking mostly gamestop let's turn it to amc which of course has been the other sort of textbook if there is a textbook meme stock um and bring in chad bynan who covers this doc over at macquarie um chad it's it's a tough job but somebody's got to do it i guess you've got a neutral rating on the stock you've got a six dollar price target and you basically say no theater stock has ever traded at this kind of evaluation so what do you do from a valuation perspective and trying to crunch the numbers on something like this thanks julie thanks for having me um you know i'd say we're continuously improving our process in terms of you know how we're recommending um our stock valuations to institutional holders we've been looking at you know some of the option trading some of the the volume some of the correlations with other meme stocks in the past couple weeks and you know this stock that went from mid teens up to 60 has kind of reverted back to 45 so we're not going to continuously update our price target you know every week or every couple days obviously there were a few important fundamental characteristics that came out last week with the equity raises but we're still analyzing we're still improving our due diligence as you mentioned you know fundamentally things are getting better um but we're still not back to where you know movie theater attendance was back in 2019. chad we just talked with a hardcore believer uh in a gamestop uh really couldn't articulate what the fundamentals of the company are didn't really have a well-defined vision for what gamestop will be five years from now as an analyst who crunches the numbers and talks to sources and contacts what do you think about that it's a great question there's there's a lot of post and a lot of you know retail investors who are pitching the fundamental view and they talk about some of these things like management changes or business improvements or changing the strategic vision of the company and then you kind of cross that with you know everything else that's going on in these names that are trading hundreds of millions of shares a day um i think it's good that you know there's a bigger group of people educating themselves on fundamentals on stocks um and i think most people understand that some of these names are just momentum plays uh so if what we get out of all this is a group of people that you know tested the waters learned a little bit hopefully didn't lose too much money i think the outcome is positive but what we continue to tell people is to really just understand um similar to what you talked about at the beginning of the show that just because a stock is a five dollar stock or a fifty dollar stock that doesn't really equate them to another five dollar stock or fifty dollar stock chad what should amc do with the money that it raised i mean should it buy more theaters is attendance going to come all the way back because if it buys more theaters then does it just have more half empty theaters yeah the the three things that we're focusing on one they have about six billion of conventional debt half is bond half is bank um those bonds have traded up from lows around you know 20 cents on the dollar now they're around par so one of the options would be to buy back or pay down some of that conventional debt the second thing is pay down the deferred leases that their landlords were able to help them with so they have 450 million of deferred leases that they will have to contractually pay at some point in the next two years and then the third thing is m a um you know i think tucker and m a uh could be helpful with some of these assets you know if they believe that they can buy at an accretive level however i definitely don't recommend that just because your stock is trading at 50 times ebitda and maybe there's some assets at five or 10 times ebitda that that always equates to an accretive acquisition so the first two would be the ones that i would i would point uh management to uh before they look to really grow the business interesting stuff chad thank you so much chad being an acquire group senior analyst who covers amc all right that does it for our meme stock special thanks so much for watching i'm sure we'll we'll continue to talk about this issue but it was good to dig in and focus on this over the past hour with myself miles and brian have a great weekend everybody akiko and jared have it for you for the next two hours [Music] [Music] you

2021-06-15 04:09

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