Hey everyone, Ross Cameron here! Today, shares of GameStop are down about 12% following the recent shareholder meeting. The stock started to decline during the meeting, reflecting what many traders saw as a classic “buy the rumor, sell the news” scenario. There was much speculation before the meeting, but the reality didn’t meet expectations. The stock hit a low of $23.80, marking a 15% drop at that point. We’ve seen a slight recovery since then, but the general sentiment remains negative. Let’s break down what happened in today’s blog!
Ryan Cohen’s Brief Comments
Ryan Cohen began the meeting with a short speech focused on creating value for shareholders. He pointed out that in a high-interest-rate environment, the bar for performance is higher. When interest rates are low, people take more risks with equities. But now, with rates higher, people are more cautious. Cohen emphasized the need for GameStop to perform well under these circumstances.
He also mentioned that the company would continue to consolidate its operations, focusing on the strongest stores and cutting costs. This comes in light of a 29% year-over-year decline in Q1 sales.
Roaring Kitty’s Massive $260 Million GameStop Position
Roaring Kitty, a high-profile GameStop investor, now owns 9.1 million shares, a stake the same size once held by Ryan Cohen. There was speculation that Roaring Kitty might join the board, fueled by memes he posted. One meme showed Michael Scott from “The Office” on his first day, which some interpreted as a hint. But the meeting didn’t address this.
Shareholder Meeting Proceedings
The meeting included some procedural steps, such as voting on five board seats, including Ryan Cohen’s. The votes passed, and the board seats were approved.
The Q&A session was underwhelming. There were three questions but no substantial answers.
- Shelf Registration and Share Offering: When asked about the recent sale of 120 million shares, the response was that there was nothing to add beyond what was in the regulatory filing.
- Direct Registration of Shares: The question about direct registration of shares got a vague response; they said they support it but didn’t offer any details.
- Future Business Plans with $4 Billion Cash: When asked about plans for the $4 billion in cash, they referred back to Cohen’s introductory comments, which were short on specifics.
Meeting Takeaways
The meeting lasted about 16 minutes and felt like a letdown for many retail investors. There was no transparency about how they plan to use the $4 billion in cash. Roaring Kitty wasn’t mentioned as a potential board member. Overall, the meeting was disappointing for those who have invested heavily in GameStop, and that may likely be why the stock is down over 12% today.
Personal Reactions
As a retail trader, I’m discouraged. It feels like the company doesn’t treat its shareholders well. Would GameStop even be here without the Reddit traders? Institutional traders seem to be the real winners now. The company needs a compelling long-term business plan, but we didn’t hear one.
There were no trading opportunities for me today with GameStop. Unless it breaks some key levels on the daily chart, it’s out of play for now.
Other Trading Opportunities
I did find success trading TRNR, which went up about 180% this morning. I made a profit on that and was happy.
My focus remains on my regular day trading strategy. I’m looking for volatile stocks, generally priced between $2 and $20, that are up at least 10% with some kind of catalyst.
Final Thoughts
The GameStop story is far from over, but it’s going to be quiet for now I think. The recent news and share offerings have killed the momentum. I’m disappointed, but I’m open to trading it again if it fits within my day trading strategy.
I’ve made about $300,000 trading GameStop, but that’s less than 3% of my total profits. There have only been a few times when it fit my day trading strategy.
For now, I’ll stick to stocks that offer more predictable opportunities. If GameStop comes back into focus, I’ll be ready.
Thanks for tuning in. Don’t forget to subscribe to the YouTube channel. I’ll be back bright and early tomorrow, streaming for Warrior Pro members. See you then.
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Disclaimer: The results shared are based on my personal trading experiences and are not typical. Trading involves significant risk, and past performance is not indicative of future results. Always practice in a simulator before trading with real money.