Watching the incredible story of game stop this week made me wonder if there was some very rough parallels with companies On the TSX Venture Exchange.
It was incredible to watch wallstreetbets amateur traders drive the demand for GME stockholders., in turn driving the price up , with the short squeeze driving it further.
But if you go back to the fundamentals, gaming is moving online -GMEs recent global sales fell by 25.7%,losses for the quarter amounted to $40.2 million, and the company still has $419.4 million of long-term debt.
This got me thinking of VPT.
When we look at what has happened, since the new promotional activities, and the momentum that has happened with the VPT
Impressive for sure.
It’s been a nice run, since the low after the tax loss selling.
Still, that’s if you bought at the absolute bottom and held.
Many people were in months or as posters here have said-years ago, and still have a way to go to make much profit, and if you look at the opportunity cost of hanging on for those years, will need another big run.
Which brings us back to fundamentals.
We are hearing that sales may come...
That’s been stated many times on these boards by many of the promoters
What are the facts?
The most recent sales from nine months were 6017.00 with COGS half of that
So based on the balance sheet, there is going to be a lot of sales needed to move the needle on this one.
Total current assets are 411,872
Current Liabilities are 1,874,379
The current ratio should be above 1, usually 2:1
VPTs is less than 1 (.21)
What does all this mean?
As Benjamin Graham said, in the short run the stock market is a voting machine. In the long run it is a weighing machine
Unless, there really are sales, and this can translate into profits, the fundamentals will tell the true story of this company, all IMO.