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GameStop Corporation

How Small Market Investors Are Being Wooed by Companies

April 13, 2021 by Staff Reporter

That has prompted a strategy adjustment. In addition to spending time communicating with analysts whose “buy” or “sell” ratings on the stock can move its price, Mr. Schreiber said, he has made a point of doing interviews on podcasts, websites and YouTube programs popular with retail investors.

“I think that they are, today, far more influential on, and command far more following in terms of stock buying or selling power than the mighty Goldman Sachs does,” Mr. Schreiber said. “And we’ve seen that in our own stock.”

Academic research suggests that over the longer term, it can be a competitive advantage for a company to have a patient base of investors who understand and believe in its strategy. Such a steady foundation makes it possible for executives to focus on longer-term strategic goals, rather than meeting the short-term metrics often dictated by Wall Street analysts, said Mr. Cunningham of George Washington University Law School.

Take Amazon. Its share price kept rising over the years, despite its skimpy and unpredictable profits and widespread skepticism from Wall Street. The individual shareholders who held Amazon stock bought into the vision of the founder, Jeff Bezos, and saw no problem with Amazon recycling its enormous cash flows back into the company rather than paying dividends. Many of those shareholders are now rich; someone who bought $1,000 worth of Amazon shares at the start of 2000 would be sitting on more than $4.3 million today.

Shares of Tesla, too, have exploded in recent years — a victory for its base of cultish followers, who believed in the company’s prospects despite years of losses. Over the past five years, Tesla shares have gained more than 1,300 percent, creating $640 billion in market wealth.

While some companies are pursuing the loyalty of small shareholders, others are pursuing their money. Several companies whose stocks climbed during January’s “meme stock” boom have taken advantage of the demand to issue new shares, turning trading enthusiasm into actual cash for the company. (Previously issued shares that are bought and sold in the open market don’t generate any new money for companies themselves.)

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Filed Under: BUSINESS Tagged With: Amazon, Amazon.com Inc, AMC Entertainment Holding Inc, Bezos, Jeffrey P, Charles Schwab Corporation, Computer and Video Games, Financial Brokers, GameStop Corporation, Jeff Bezos, Koss, Michael J, Law, Money, Musk, Elon, Personal Finances, Plug Power Inc, Podcasts, Reddit Inc, Research, Robinhood Financial LLC, Stocks and Bonds, Tesla, Tesla Motors Inc, YouTube

GameStop says it is considering selling additional shares.

March 23, 2021 by Staff Reporter

Shares of GameStop — the struggling retailer at the heart of the trading frenzy that captured the country’s imagination in January — tumbled in after-hours trading on Tuesday as quarterly earnings missed expectations and the company said in a filing it could sell additional shares.

The company’s stock was down roughly 12 percent shortly after 6 p.m. The shares had remained steady amid a brief conference call in which executives presented the company’s results and declined to take questions.

But the stock began to slide after the company said in a separate filing with the Securities and Exchange Commission that it was evaluating whether to sell additional stock “primarily to fund the acceleration of our future transformation initiatives.”

Such a share sale would reduce the value of the company’s outstanding stock, essentially by increasing the supply, in a process called dilution.

a battleground between a throng of individual traders loosely organized on Reddit and sophisticated hedge funds that had bet aggressively that the shares of the largely brick-and-mortar retailer were doomed to fall.

For a brief moment in late January, the Reddit traders got the upper hand, setting off a so-called short squeeze that sent the share price up more than 1,700 percent in mere weeks. The stock subsequently tumbled, losing nearly all its gains, only the resume its climb late last month. At the close of trading on Tuesday it remained up a remarkable 865 percent this year.

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Filed Under: BUSINESS Tagged With: GameStop Corporation, Hedge Funds, Securities and Exchange Commission, Stocks and Bonds

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