In this article, we discuss AMTD Digital and 4 other meme stocks Redditors are buying in August. If you want to see more meme stocks that Redditors are buying this month, click AMTD Digital and 9 Other Meme Stocks Redditors are Buying in August.
5. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 31
GameStop Corp. (NYSE:GME) is a Texas-based specialty retailer that provides games and entertainment products through online channels and retail stores in the United States, Canada, Australia, and Europe. GameStop Corp. (NYSE:GME) was perhaps the biggest meme stock of 2021, which cost popular Wall Street hedge funds like Melvin Capital Management, D1 Capital Partner, and Point72 Asset Management prominent losses when they aggressively placed short bets against it.
On July 20, GameStop Corp. (NYSE:GME) reported initial success with its NFT marketplace that was launched on July 11. The NFT Marketplace has over 5,000 ETH in trading volume and $7.2 million in value since its launch, which more than doubles Coinbase Global, Inc. (NASDAQ:COIN)’s all-time NFT volume.
Wedbush analyst Michael Pachter on July 22 lowered the firm’s price target on GameStop Corp. (NYSE:GME) to $7.50 from $30 and maintained an Underperform rating on the shares. GameStop Corp. (NYSE:GME) stock remains at levels that seem disconnected from the business fundamentals, and the firm’s turnaround plan has so far been ineffective, as seen by the recent layoffs, the analyst told investors. He is also doubtful about the potential for continued success of its new NFT marketplace.
According to Insider Monkey’s data, GameStop Corp. (NYSE:GME) was part of 31 hedge fund portfolios at the end of Q1 2022, up from 29 funds in the last quarter. D E Shaw is a significant shareholder of the company, with 734,403 shares worth $122.3 million.
Here is what Bronte Capital Amalthea Fund has to say about GameStop Corp. (NYSE:GME) in its Q1 2022 investor letter:
“Gamestop is a retailer of video games on DVD ROM trying hard (and maybe with some success) to reinvent itself as an alternative computer game distributor. The company raised enough money that bankruptcy is not an immediately likely outcome. (GME would have gone bankrupt except for the willingness of largely retail investors to provide them with much more cash.)
Both have bad financial results. Gamestop’s last financial results were terrible. And both stocks more than doubled very rapidly in March from market caps that were absurd to market caps that are more absurd. We are of course completely aware that they can double again and again after that. Their valuations are absurd but if you double the price they are not twice as absurd. They are just similarly disconnected from reality.
The reason we want to talk about them is that it is indicative of what is going on. Gamestop, the most meme of all stocks, announced a possible stock split and the stock, after market that day, traded up 17 percent. We could joke that every child knows that cutting a pizza into more slices yields more pizza. But in this market, not accepting that stock splits add value is a recipe for losing money.”
