Why to REALLY buy GME (Solid DD)
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| Author      | Source | 
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| [u/tarheelsurfer](https://www.reddit.com/user/tarheelsurfer/) | [Reddit](https://www.reddit.com/r/wallstreetbets/comments/lf023x/why_to_really_buy_gme_solid_dd/) |

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[Discussion](https://www.reddit.com/r/wallstreetbets/search?q=flair_name%3A%22Discussion%22&restrict_sr=1)

LEGITIMATE ARGUMENT TO INVEST IN GME AT THESE PRICES (Short sqeeze and hype aren't reasons).

Sherman started a turnaround of Gamestop when he first took over April 2019. He cut the dividend, began consolidation (cut some fatty stores), and began debt reduction. COVID threw a wrench in this because he didn't move online nearly fast enough.

When Burry first invested in GME, there was a reason. What reason? He spoke with Sherman about his plans and thought they wouldn't just survive, but thrive. Cohen also had a similar situation, and later of course he got involved. Sherman listens to both, and in their letters to him they basically tell him where he fucked up and how to move Gamestop forward.

Fils-Aimé the Nintendo guy that likes to turn companies around is added to the board. He turns stuff around as a hobby and is an insanely good marketer. This is shown in particular with his Nintendo of America endeavors. [u/kitrosreddit](https://www.reddit.com/u/kitrosreddit/) told me not to forget about Reggie so I didn't this time (sorry to the 100ish people that saw this a few days ago)

Next up we see the Microsoft deal. Although exact numbers aren't available that I can find, Gamestop will be receiving a royalty from gaming equipment sold via Microsoft. Microsoft is also expanding Gamestop's inventory on the inside and employees will use Microsoft software to run the stores. Microsoft doesn't want Gamestop to fail, nor will they let them. With 27% of new games bought at Gamestop and 40% of used games bought there, Microsoft saw an excellent way to try and compete this console cycle.

We recently saw Gamestop's holiday earnings. With a yearly revenue of roughly $7 bil, they were unprofitable this year. The current P/S ratio makes no sense unless it is expected to go out of business (good luck) or that it will not grow significantly over the coming years (lol). However, this is expected to change with earnings starting in March. They are expected to continue to be profitable moving forward as well. Gamestop still has roughly $500 mil in debt. How are they going to pay this off!!!??? Liquidating stores and consolidation. This was a Cohen continuation idea that Sherman had started, just without the vision to make it succeed. A small stock offering (let's say 2%) would also leave them in an excellent financial situation. Additionally, we have the 300% YOY online sales increase, which accounted for over 30% of total sales. This is only expected to increase moving forward. While overall sales decreased by 3% YOY, inefficient stores were cut out of the picture. Comparative store sales increased by 5% YOY, but this was even stagnated due to state restrictions on 'nonessential' businesses. Places that had significantly fewer COVID numbers had over 30% YOY growth.

Next, we have the Chewy powerhouses joining the board of directors. Out with the old, in with the new. Even though most directors were acquired in 2020, these new additions add incredible value to the company. Sherman listens to Cohen. Cohen and friends had some focuses at Chewy that led to insane amounts of profit. They focused on cutting costs and maximizing efficiency. Expect the same for Gamestop. This was something that can be effectively implemented with all the new leadership. All ears are on Cohen and his ideas to make Gamestop a 1 stop gaming shop.

Most recently were the adds on 2/3/21 Francis: That AWS engineering guy that's now heading technology!? Nice. Durkin: Customer service VP from Chewy is now in charge of Gamestop's customer service!? Fuck yes Chewy has insanely good customer service. Krueger: Big filler boi from Amazon et all now running e-commerce fulfillment!? Dope.

Conservative price target: $200 by mid 2021 with little hype and absent a short squeeze

Tldr: Idc about a squeeze or hype but I like the stock.

But what do I know I'm literally retarded and not a financial advisor... positions 5200 shares GME, 52x covered calls sold exp 2/12, 50x calls bought exp 2/26, a few bucks in cash waiting for a drop if it happens. Tell if I'm wrong somewhere with sources linked please and thank you.

Edit: As requested, my average cost is roughly $60 after buying back in late last week. I had original shares at an average buy in of about $30 assigned to covered calls on 1/29. I believed the company had too much downside at those prices.
