And if you were to take a look at the one day chart uh, there was actually a point where the stock had soared close to 72 percent. So what i plan to do in this video is i plan to talk about what exactly led the stock to soar. Nearly 70 we’re going to analyze the gamestop underlying business and then try to determine whether the seventy percent uh that actually happened in the stock makes sense considering where the business is going to be headed in the future and then we’re also going to walk through some Uh gamestop stock forecast and price targets, so i’ll ask in return that if you find this video to be helpful, don’t forget to hit the like button. Don’T forget to comment and don’t forget to subscribe. Now, as you can see, gamestop is currently trading for sixty five dollars and one cents per share and after hours, uh the run has kind of cooled off a little bit where we can see that it’s uh trading for sixty four dollars and eighty cents per share And is down about point thirty, two percent, but this run that the stock has seen has not actually just happened in a one day span. So if you were to take a look over the past five days, the stock has gone from thirty eight dollars per share and is up close to 70 percent over the past six months. This stock has gone from four dollars a share and is up about.
Fifteen hundred percent and over the past year the stock has gone from four dollars and sixty two cents per share and is up about 1300. Now, despite this run, what we’re actually seeing is that gamestop stock has been uh very volatile uh throughout its history. So we can see that from 2002 all the way up until 2008 uh the stock uh peaked at around the 63 dollars per share. Then it gave up those gains and declined about 64. Then it was kind of uh consolidating for uh about a four year span. It increased uh all the way up until the year 2013, where it was around uh 57 per share, then from 57 per share in 2013 uh. We see that the the stock uh declined all the way to around the bottom and declined about 94, but recently the stock has seen a resurgence, so let’s talk about what exactly has led to that. So, as you can see, the video game stock soared as close to 70 percent to a high of around 73 dollars per share on friday, and that brought its gains up to more than 100 this week alone, and because of this trading was halted multiple times due To high volatility, gamestop has more than 138 percent of its float shares, uh sold short, so a lot of investors are actually betting that the stock will go down, and that is the single most assorted name in the u.s stock market according to factset.
So what we saw was that the stock initially jumped higher last week after the company announced that chewy co, founder and former ceo ryan cohen, was joining the board and since this stock is uh one of the most distorted stocks in the u.s stock market, we see That the news triggered massive short covering where hedge funds and other players had to rush in to cover their bets against the stock. We saw that retail investors piled in and as of early afternoon trading. More than 92 million shares of gamestop have changed hands and nearly quadrupling its 30 day trading volume, average of 23.8 million uh. We have well known uh short seller citroen research, which has been very vocal about the stock and they’ve stated that buyers who are buying at these elevated levels are actually the suckers at this poker game and citroen said that gamestop would fall right back down to 20 Per share extremely quickly on friday, citroen said it would not be commenting on gamestop any longer because of attacks from the angry mob that owns the stock and overall, if you were to take a look, the stock is up more than 250 in 2021, after a 209 Rally last year now, for those of you who may be unfamiliar, gamestop is a fortune 500 company and also actually is pretty surprised to see that considering you know the underperformance that we’ve seen in not only the stock price but the business as a whole.
But we see that they’re headquartered in grapevine texas. They are a digital first omni channel retailer offering games and entertainment products in its over 5 000 stores and comprehensive e commerce properties across 10 countries. So talking a little bit more about this underperformance for the business, what we saw was that gamestop was for sale in 2018 and the shifting industry of buying and selling video games has made it less essential to gamers, especially as downloads become the norm, and the world Continues to endure pandemic, and all of that was why the stock price was so low to begin with, as we saw in the chart, it was trading for around three to four dollars per share last year, but what we saw was that it became a pet project. Uh for reddit day traders who invested in the stock of the company and have soared a roaring comeback for the business. So let’s talk about that more in detail, because i thought that was actually very interesting. So much of the sudden interest in the stock is actually due to an ongoing campaign from users congregating on the subreddit wall street bets encouraged by some youtube and tick. Tock investment personalities with numerous users noticing that the company had a large number of short shares. 71.2 million compared to about 70 million the company had outstanding in december 2020 and therefore they bought up large amounts of the stock. In order to take advantage of that.
And what we saw was that a lot of these investors who were buying up the shares were actually being very crucial of citroen research. Now citroen research, for those of you who may not know, is a very prominent short selling firm, and what we saw was that today, andrew left who’s the managing partner of short seller citroen. They said that they’re abandoning the stock because of harassment from the same bulls from you know the wall street bets investors and all of those people that had decided to buy the stock. You know because of youtube personalities, tick, tockers and whatever the case may be so because citroen was facing so much backlash from them. They actually decided to stop uh covering gamestop and that’s. Why we saw that the stock also soared today and here’s. What andrew left, the managing partner of short seller citroen had to say, since they decided to abandon the coverage of gamestop stock? He said what citroen has experienced in the past 48 hours is nothing short of shameful and sad commentary on the state of the investment community. He said they will no longer be commenting on gamestop, not because we don’t believe in our investment thesis, but rather the angry mob who owns this stock, has spent the past 48 hours committing multiple crimes that will be turning over to the fbi, scc and other governmental Agencies, so this definitely seems to be a very crazy situation. You know from the surface, when you see that gamestop stock is uh going up by 70, you would think it is uh because of them you know doing something very different in the business, something more underlying.
Fundamentally in the business itself, but what we’re seeing is that we actually have beef between the bulls and the bears of gamestop stock and that momentum is essentially creating popularity and hype for game stop stock. He also said that this is not just name calling and hacking, but includes serious crimes such as harassment of minor children. We are investors who put safety and family first and when we believe this has been compromised, it is our duty to walk away from a stock. He said we hope that government reinforcement uh will eliminate this problem uh for all future market commentators whose families get terrorized by people who naively think they are anonymous right now. What we’re seeing is a classic short squeeze and jim cramer actually commented on this a little bit more and he we can also try to explain what that is for those of you who may be unaware. So how exactly does a classic short squeeze work? So short, sellers borrow shares and bet that a stock will decline and when the stock press instead rises, the shore sellers must buy those shares at the higher prices to return them to the lender. These purchases can drive the stocks price yet higher, and this situation can then repeat itself. So literally after going over all of that to very insane news, let’s try to dial it down a little bit and talk about the underlying business itself, because at the end of the day, like i always say where the stock is going to be headed in the Future is really dictated by the underlying business and the underlying fundamentals.
Now uh. Just very briefly, like we went over uh it’s, a trade on the new york stock exchange under ticker symbol. Gme. This company has a market capitalization of 4.534 billion dollars. It has a beta of 1.43, which doesn’t mean that it’s more volatile than the market, and this is currently an unprofitable company. Now, if we were going yahoo finance this to look up some statistics about the shares themselves, as we can see, they have shares outstanding of 69.75 million and shares short of 71.2 million. So clearly, a lot of investors are betting, that a gamestop stock will go down and especially considering that they’ve shot up by about close to 70. Today, i actually would be one of those people that would bet that the stock would go down, but we also see that you know not only me, but wall street also has the same opinion. So we’re going to take a look at the gamestop stock forecast and price targets. Currently, the analyst rating consensus is a hold based on six analyst ratings. We see. One analyst has the stock rate as a buy three have a rate as a hold and two have a rate as a sell and the average analyst price target is at 10 and 72 cents per share and compared to the last price of 65 per share. That would represent about 84 downside and we can even see the various price targets by the wall street analysts.
So the highest uh price target by an analyst is nineteen dollars per share, which is still a lot lower than sixty five dollars per share and the lowest is all the way down to one dollar and sixty cents per share. But hey you know again. Let’S talk about the business itself, so here’s a look at gamestop reporting, their 2020 holiday sales results. So we saw that on january 11, 2021 uh, the company reported worldwide uh sales results for the nine week holiday period ended january 2, 2021, which reflected a 4.8 increa percent increase in comparable store sales and a 309 increase in e commerce sales uh. Overall, though, we saw that total sales declined by 3.1 percent, driven by an 11 decrease in the company’s store base due to its planned uh de densification strategy, temporary storage closures around the world due to government mandates and lower store traffic. Now this is a look at the company’s q3 investor presentation and if we were to take a look, they basically summarized quarter three at a glance and here’s what it was basically summarized by. They saw significant reductions in their sg, a expenses further de densification of the store fleet, so they are closing more and more stores a strengthened balance sheet, enhanced core capabilities, expanded omni, channel fulfillment capabilities and they launched a new mobile app. So we can see that since 2019 they’ve closed approximately 800 stores worldwide and are anticipating reaching over 1 000 by the end of fiscal year 2020.
They completed the wind down of nordic countries operations and expected 15 million dollar ebitda contribution reduced over 440 million sg, a expenses, approximately 67 of which is permanent, they’ve focused investments in a digital first e commerce platform, which delivered over 400 uh channel sales growth year. To date, delivered over 350 million in working capital improvements, improved liquidity by approximately 95 million dollars, they’ve reduced a long term, debt obligation by 530 million dollars and they’ve repurchased 38.1 million shares. So clearly, what they’re doing right now is they’re really trying to transform the business, and here are some of those transformations and catalysts for future growth. So one of the things that they want to do is camp uh capitalize on the new console launch, which you know i’m sure all of you are aware that we have the ps5 and the new xbox they want to leverage their game, stop, but ecosystem of stores. E commerce and the new mobile app so clearly it looks like that they want to become more of a e commerce, slash a digital related company. They want to expand uh the product categories, to increase their addressable market and drive consumer ltv, drive improvement in operating profitability and invest in growth and also let’s talk about where their current financial uh positioning is. So. This is a look at the company’s balance sheet and we see that they have a cash and cash equivalents of 445.9 million dollars uh, but debt actually is uh pretty comparable to the amount that they have in cash.
So if we were to add up a short term debt of 244 million with a long term debt of 216 million, we can see that there is uh an equivalent amount of debt in comparison to cash and cash equivalents, about a one to one ratio. As for net sales, though, we can see that uh they are down in comparison to last year, so october, 31st 2020. They had one billion dollars of net sales, which was down from 1.4 billion of last year, and this company is unprofitable. But what we see is that their net loss is actually declining over time and this company has negative cash flow from operations and therefore they have negative free cash flows. So after going over all of that, what is my final conclusion on gamestop stock? I think that the company is really trying to reinvent itself and shift from just being an electronics retail company and move over to the e commerce space uh be more of a digitalized company which we saw with the launch of their mobile app. So i definitely like the efforts that they’re doing over there, but i think that the stock going up this much in such a short amount of time, and even if we were to take a look at the one year, performance we’ve seen that it’s gone from four Dollars per share and it’s uh up already about thirteen hundred percent. I think that has gone up way too quickly in a short amount of time, and therefore i am personally staying away from gamestop stock.
But of course you know that’s just my personal opinion. You don’t have to agree with me and i’d love to hear what you have to say down in the comment section below. Are you a fan of gamestop stock and will you be buying, like always anything presented in this video, is not any sort of financial advice. It’S very important for you to do your own research and do diligent if you found the video to be helpful. Don’T forget to hit the like button and don’t forget to comment.