Hey everyone, Ross here! GameStop shares are trading down roughly 12% after the recent shareholder meeting. The shares started dropping during the meeting itself, and many investors were buying on speculation into the event and then selling on the news. In this blog, I’ll share my notes and thoughts on the meeting and give you my thought process around how I digested the whole situation. Let’s dive into the details!
GameStop Stock Update
Currently, GameStop shares are down around 12% following the shareholder meeting. The selloff started during the meeting itself. This seems to be a classic “buy the rumor, sell the news” scenario. Expectations were high, but the reality didn’t live up to the hype. The stock hit a low of approximately $23.80, marking a 15% decline at one point. We’ve seen a bit of recovery from those lows, but the excitement has waned.
Roaring Kitty’s Position
Roaring Kitty, a well-known figure in the GameStop saga, now holds 9.001 million shares as of his last update, currently worth around $227 million. This is the same size position Ryan Cohen had before joining the board. There was also speculation that Roaring Kitty might join the board due to some meme posts, like the one showing Michael Scott from “The Office” on his first day.
Shareholder Meeting Details
Ryan Cohen started the meeting with a brief introduction, emphasizing their focus on creating shareholder value. He mentioned the high interest rate environment, making it crucial for the company to perform well. When interest rates are high, people tend to invest in safer options like bonds instead of equities. Cohen talked about sticking to the current business model and improving efficiency, but it was all pretty vague. The meeting included some procedural stuff like voting for board seats. These seats were already nominated and included Ryan Cohen and a few others. The votes passed.
The Q&A session was disappointing, with three questions but no substantial answers. Here’s a rundown of the Q&A:
- Shelf Registration: They were asked about the $3 billion they raised but gave no new information beyond what was in their regulatory filings.
- Direct Share Registration: They said they support it, but there wasn’t much detail.
- Future Plans with Cash: Cohen’s intro supposedly addressed this, but it was vague.
The meeting wrapped up in just 16 minutes, leaving many retail traders frustrated.
Retail Trader Perspective
As a retail trader, the lack of transparency was disheartening. It felt like GameStop cashed in on us without sharing their plans for the $4 billion in cash. There was no mention of Roaring Kitty joining the board, which was expected but still a letdown. This could be due to potential conflicts of interest given his active role on social media. Retail traders, especially those from Reddit, are feeling the burn. Sustaining momentum is challenging, especially with the increased share supply. The demand needed to push the price up again is substantial. Reddit traders played a significant role in saving GameStop. However, it seems like institutional traders are winning now. GameStop needs to present a compelling business plan to utilize the $4 billion in cash effectively. The long-term viability of the company remains uncertain.
Trading Opportunities and Strategy
I didn’t trade GameStop today. Instead, I found success with other volatile stocks. Here are my criteria for potential trades:
- High relative volume
- Breaking news or catalysts
- Priced between $2 and $20
- Up at least 10%
Final Thoughts
GameStop needs to break some key levels, like $40 or $50, for me to consider trading it again. The shareholder meeting was disappointing, and the future of GameStop is uncertain. For now, I’ll stick to my regular day trading strategy. I’ll keep an eye on GameStop, but I won’t trade it unless it meets my criteria.
Thank you for tuning in. Hit that thumbs up, and subscribe to my YouTube channel if you haven’t already. I’ll be trading live again tomorrow for Warrior Pro members. Remember, trading is risky, so manage your risk and take it slow. See you tomorrow!
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Warrior Trading was founded by Ross Cameron in 2012. Today Warrior Trading is a thriving community of thousands of day traders learning to trade under the curriculum designed by Ross.
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