Gill Fails To Deliver The GameStop Gains

A day of surprises, the attention economy's latest push, and one stock getting a major lyft.

NEWS
Gill Fails To Deliver The GameStop Gains

Chaos ensued this morning ahead of Roaring Kitty’s live stream, with GameStop releasing earnings and a new share offering. Meanwhile, hotter-than-expected nonfarm payroll data threw a wrench into the “softening labor market narrative” and had rates roaring back. Let’s see what else you missed. 👀

Today's issue covers a day of GameStop surprises, the attention economy’s latest push, and one stock getting a major lyft. 📰

Here's today's heat map:

4 of 11 sectors closed green. Financials (+0.46%) led, & utilities (-1.09%) lagged. 💚

The Reserve Bank of India held interest rates steady for the eighth meeting while raising its growth outlook. Two of the six members voted for a 25 bp cut, as the current election upset adds uncertainty to the economy’s outlook. 🔺

Nonfarm payrolls came in hotter than expected today, spooking the bond market and causing rates to reverse their multi-day decline. Despite the volatility in month-to-month data points, the trend in most labor market indicators remains clear: the market is softening. 🫠

Crude oil and the broader energy complex posted their third straight weekly loss, as supply is expected to increase while demand remains uncertain. OPEC+ production increases and weak U.S. economic data remain near-term headwinds for the market. 🛢️

Ski resort owner Vail Resorts melted to nearly 4-year lows after its earnings and sales failed to meet Wall Street’s estimates. ⛷️

Software maker Samsara slumped 12% after its disappointing second-quarter and full-year financial forecasts outweighed its top and bottom-line beats. 🔻

Oddity Tech rose 21% after the beauty and wellness company announced a $150 million share buyback program and boosted its second-quarter outlook. 💰

Semiconductor manufacturer Semtech’s shares were slammed by 18% after announcing its CEO Paul Pickle had left the company, following differences in approach between him and the Board’s vision for creating shareholder value. 👨‍💼

Biopharma stock Geron jumped 18% after the U.S. Food and Drug Admin (FDA) approved its blood disorder treatment earlier than expected. 💉

Satellite imagery provider Planet Labs rebounded 11% after reporting a narrower-than-expected loss and topping revenue estimates marginally. 🛰️

Other active symbols: $AMC (-15.20%), $FFIE (+12.24%), $NVAX (-7.08%), $LPA (-48.03%), $PLTR (-2.02%), and $BNRG (-7.48%). 🔥

Here are the closing prices: 

S&P 500

5,347

-0.11%

Nasdaq

17,133

-0.23%

Russell 2000

2,027

-1.12%

Dow Jones

38,799

-0.22%

EARNINGS
Only Cohen Can Solve GameStop’s Core Problem

Yesterday, we left the GameStop saga at a point when it appeared that Keith Gill (AKA Roaring Kitty) was all but set to become a billionaire, as shares climbed sharply in anticipation of today’s live stream event at 12:00 pm ET. 🧑‍💻

Unfortunately, that enthusiasm was interrupted by an early-morning release of the company’s earnings and plans to sell an additional 75 million shares (on top of the 45 million shares it sold during May).

The company was scheduled to report results on Tuesday after the bell; however, with this week’s resurgence, it likely wanted to take advantage of its good fortune by raising more capital at elevated prices. 🤑

I believe they technically had to release their earnings simultaneously in order to stay good in the eyes of the Securities and Exchange Commission (SEC), which would classify their earnings as material information in investors’ decision process. It honestly would have been worse if they registered to sell more shares and then released their terrible results a few days later.

But speaking of terrible results, the struggling retailer’s sales fell 29% YoY, a much steeper drop than Wall Street expected. While its net loss did narrow YoY, the point is its core business is still not profitable. 👎

Like the previous four quarters, management opted not to hold an earnings call, likely because they still don’t have any answers for analysts’ and retail investors/traders’ most pressing questions.

As a result, investors turned their attention toward Roaring Kitty’s live stream, hoping he could provide some much-needed answers.

And…answers he did not provide. Despite over 500,000 concurrent watchers tuning in and over 2,000,000 million views accruing on the replay since then, Keith Gill’s return to YouTube was pretty lackluster. 😒

One positive aspect of this whole debacle was that the Stocktwits product team unleashed its live earnings call feature directly on the $GME symbol page and quickly piped in the live stream for Roaring Kitty. That racked up tens of thousands more views as the community reacted to the video in real-time. 🫨

Nonetheless, rather than providing the clarity investors had hoped for, Keith Gill used his return to YouTube to mostly joke around in what felt like a streamer’s “just chatting” video. And the market seemed to agree with that assessment, as GameStop shares slid throughout and closed at the day's lows. 🔻

The only real update provided was Gill sharing a live look at his E*Trade account, which showed him maintaining his position (albeit with much fewer gains than before). And that his primary thesis around the stock is that CEO Ryan Cohen and his group of trusted fellows will “figure it out.”

That’s the bet he’s essentially making…and it seems many traders and investors aren’t comfortable betting the farm on the current executive team. 🤷

That’s especially true given that not much has changed from a business fundamentals perspective since Cohen took over. Sure, they’ve cut costs to lengthen their runway, but their core issue remains a lack of revenue growth. And until they solve that, many believe they’re a “BlockBuster” 2.0 in the making.

I joined Yahoo Finance this afternoon to discuss exactly that. 👇

Ultimately, the stock was down 40% today, and Stocktwits sentiment soured into “extremely bearish” territory due to the continued lack of clarity around the business and Roaring Kitty’s real motivations. 🐻

Many people don’t understand why Gill is betting on management’s turnaround prowess with short-dated call options. His investment vehicle and trading approach don’t seem to match what he’s telling the public.

Sure, he could be playing the long game by anticipating that his short-term positions would help fuel the stock and let the company raise new capital at elevated prices, therefore lengthening its runway to stage a longer-term turnaround. But many aren’t giving him the benefit of the doubt. 🧠

Anyway, we’ll have to wait and see how things play out over the weekend and into next week. What’s clear is that with Roaring Kitty back in the mainstream, volatility in GameStop shares is here to stay. So investors and traders need to know the game they’re playing and manage their risk appropriately.

Because the game is not stopping anytime soon in GameStop… 🤪

COMPANY NEWS
The Attention Economy Keeps Pushing Boundaries

For those of us who use our time in the air to disconnect and relax, United Airlines may not be the airline for you anymore… 🤦

That’s because the airline is partnering with Kinective Media to serve passengers personalized ads on stea-back television screens, in its app, and among other platforms. 😵‍💫

It’s the latest company to leverage its customer data, as banks, retailers, and other large companies are looking to generate additional high-margin revenue via advertising.

Although United did not offer projected sales for this new initiative, it said, “…there is potential for 3.50 hours of attention per traveler based on average flight time.” ✈️

As for Kinective Media, it’s already working with Norwegian Cruise Line, Macy’s, IHG Hotel & Resorts, TelevisaUnivision, and JPMorgan Chase, highlighting the reality that these types of data-driven advertising initiatives are here to say.

The Stocktwits community appears optimistic about this development, with sentiment ticking into bullish territory. We’ll have to wait and see if it makes a difference, as its shares remain stuck in a multi-year trading range. 🤷

STOCKTWITS “CHART ART”
Uber Gets A Lyft As Competitor Shares Upbeat Outlook 🚗

With Lyft holding its first investor day and issuing upbeat financial targets for 2027, the rest of the ridesharing sector caught a bid. 💸

Stocktwits user @Professor was one of several pointing to the strength in Uber, which found support at its former highs, anchored VWAP, and is now breaking out above the downtrend line from its recent highs.

With Professor describing this as “a clean breakout,” Uber, Lyft, and others in the space are likely to be on traders’ radars for the weeks ahead. 👀

If you like this chart and commentary, you’ll love our “Chart Art” newsletter. We’ll deliver you the best trade ideas and analysis from the Stocktwits community every evening by 8 pm ET.

And if you need another reason to join, you’ll receive a welcome email with a list of the top Stocktwits chartists to follow for real-time posts like this.

Bullets From The Day

GM taps Costco’s help to sell its new electric vehicles (EVs). The automaker increasingly uses the Costco Auto Program for EVs as it expands its portfolio to more mass market segments with vehicles like the Chevy Equinox. The program acts as a partner for franchised dealers and automakers, offering Costco members special pricing and other incentives. Costco Auto facilitates roughly 500,000 vehicle sales annually, which could provide another important sales channel for GM and other automakers trying to grab market share in the EV space. CNBC has more.

🧑‍🏫 Private equity giant Bain Capital buys edtech platform for $5.60 billion. The cloud-based education software vendor PowerSchool is the latest deal in the space, as cash-heavy funds seek to snatch up underperforming software firms at bargain prices. Still, the acquisition seems like a win for shareholders, coming at a valuation similar to what the company experienced in late 2021 before the tech wreck began. More from TechCrunch.

 Samsung Electronics workers strike for the first time in history. The moves come at a time when the Korean corporation faces increased competition from other chipmakers, particularly in the artificial intelligence (AI) chips space. The National Samsung Electronics Union (NSEU) is the largest of the company’s several unions and called the one-day strike as negotiations over pay bonuses and time off stalled The majority of the striking workers came from Samsung’s chip division, though it’s unclear if it had enough participation to truly interrupt operations and pressure management to act. The Verge has more.

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