How (And Why) Investors Should Play GameStop

Before GameStop Corp. (GME) exploded onto the market's "main stage" in January, it was a struggling brick-and-mortar video game retailer, years past its prime. Its shares floated along in the sub-$10 range for months.

Chart, Stocks, Exchange, Business, Cash

The stock was catnip for short-sellers, who made out pretty well… until a group of investors from WallStreetBets generated serious volume and bid the stock up several thousand percent to take the shorts to the mat.

Now, GameStop was significant because it showed regular investors what Wall Street insiders have known since, well, forever: Short "Super Squeeze" scenarios like the ones I research constantly for my subscribers can potentially be insanely profitable.

But it also seems to have been a wake-up call for GameStop's head honchos. A timely boardroom arrival seized on the attention – and all the capital it brought along – as a fighting chance to turn the company around, back into a retail leader in the $60 billion U.S. video game industry.

And you know what? I think it's going to work, and I'll show you why in a second. There's potential here as GameStop becomes a stock well worth owning again. If this plays out the way I think it will, this company could, in certain places, give Amazon.com Inc. (AMZN) a run for its money.

Let me run you through what's happening there at GameStop and tell you exactly how to play it.


While the Media Circus Was Happening…

There were 10 days or so back in January and February when you couldn't go online or turn on your television without hearing about GameStop and the "meme stocks" that Internet-savvy, app-based retail investors were piling into for triple- and quadruple-digit "Super Squeeze" profits.

We didn't hear much from GameStop management, but that doesn't mean they were asleep; at the peak of the frenzy, there was some extensive executive shakeup underway.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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William K. 3 days ago Member's comment

Certainly the new management has a chance to do big things, AND if they get it all right the first time then it may indeed be a success. So here is to hoping that it works.

And for all those who hope to get rich quick as the stock value rose, keep in mind that there needs to be willing and able buyers in order to profit from selling.

Dick Kaplan 3 days ago Member's comment

Well said, Wall Street Bets was right that $GME was worth more than the street believed, but once it rose so much... well there is no point in buying an over valued stock.

Bruce Powers 3 days ago Member's comment

If Chewy's Ryan Cohen works his magic, we may see great things from #Gamestop in the near future.