Reddit traders continue to hold on to GameStop (NYSE:GME) and a lesser degree, AMC Entertainment (NYSE:AMC) stock. GameStop posted Q4 revenue falling by 3.2% to $2.12 billion. The firm showed some strength as comparable sales rose by 6.5% Y/Y.
This year, the company will focus on transformation. It has a good chance of growing cash flow by riding the console cycle. It may increase net sales, sell more game titles while building on a business model that embraces digitization.
In the near-term, GameStop’s fundamentals show unremarkable growth ahead. Its stock value will hold so long as Reddit investors do not sell. GameStop may sell some shares to raise cash and to invest back in the business. So long as the stock sale is small, the stock should not fall.
AMC’s turnaround play depends on theatres re-opening. As more people get vaccinated, moviegoers will trade in the at-home streaming experience for the movie one. AMC also has social distancing measures and sanitation protocols in place. This will minimize the risks of an infection. Still, the new variant is more contagious and deadlier. But the vaccine is effective against all COVID-19 types. This suggests movie attendance should rise steadily this year.
