What's going on moon gang, i hope that you're having a good one, this video will be a very quick wrap up about what in the world is going on with gamestop. Now, if you've been paying attention to gme at all, you know that today the stock did not perform the best, in fact it dropped 27, which means it closed out the day just above 220 dollars in this video. I want to explain what is going on with the stock and the company in general and why i truly believe that not all hope is lost, so let's hop right into it. Yesterday, after the market closed on june 9th it was gamestop had its earnings announcement.

So we found out a lot about what was going on with the company in terms of its performance and what's going on in the future, gamestop sales rise 25 as retailer chases e-commerce growth says it may sell 5 million shares. On top of all that, we know that the current ceo is stepping down at the end of july, so we were kind of waiting to see if there'd be any announcement about who the new ceo is and ding ding ding. We got that answer the video game. Retailer said it tapped: amazon, executive, matt furlong as its new ceo.

This makes a lot of sense. Obviously, gamestop is trying to improve the fundamental trajectory of it as a company by getting into e-commerce. So it makes a lot of sense to pull that off, that they tap a guy who has a ton of ecommerce experience at one of the premier, e-commerce companies amazon. So in my opinion, this fit with matt furlong.

It makes a lot of sense. So, let's hop into more of the nitty-gritty of the actual earnings announcement wall street was expecting gme to report a loss of 84 cents. So instead it actually reported a loss of 45 cents, so it beat on that and they were also expecting a revenue of 1.16 billion, but instead it have a revenue of 1.28 billion so right there if it beats on earnings per share and also beats on revenue. Why in the world did it drop? Well, it kind of comes into two twofold first, and this is more minor.

The company declined to provide a forecast for the year when it comes to stocks and the stock market. People don't like unknown variables. So right there they're throwing this out that they're not going to give any expectations, no guidance. The market obviously doesn't like that, but let's be a little bit fair.

There are many companies who are doing that right now, they're just choosing to not give any guidance because we're we live in volatile times and we're just all kind of waiting for the world to really return to this new, normal and fully open up. But more importantly, right here, gamestop filed a prospectus with the sec to sell up to 5 million shares of its stock from time to time in an at the market offering the funds it raises. Through these stock sales will be used for general corporate purposes. Investing in growth initiatives and strengthening its balance sheet according to the company, as of may 1st gamestop said it had paid off all of its long-term debt and no longer had any borrowings under its asset-based revolving credit facility.

So here's what's going on we've seen this before, with both gamestop and amc, they announced an at the market offering the the public. The stock market doesn't like it because they know they're, basically diluting the stock at this time by the the tune of 5 million shares and here's what happens, there's a negative reaction to it. Slowly but surely they complete the at the market offering and then eventually there's a press release that the at the market offering is over and the stock bounces right back we've been here before i mean gamestop. Did this just in april of 2020, amc has done it multiple times.

This is just par for the course. They make the announcement that they're going to do it stock drops they get done with it. They announce that they're done and then the stock pops right back. We've seen this before now, let's hop a little bit into the data for everyone interested in the short interest.

So after today there was a net borrow against gme of 194 000 shares and the short interest went up to 17.55. Don't forget that the current utilization, the ratio of shares that are borrowed divided by total loanable shares is 52 and as of now, the shares on loan is just around 13 million. With all that this, this is a high magnitude. Most stocks on the stock market have a short interest below 5, so right now the fact that we're cruising around 17 18 - this is still a highly shorted stock and what i think is interesting is ever since march 24th.

Look at this. This is the average duration of the shares on loan betting against jimmy remember to take a short position. You have to loan the shares out, then you can short and then, when you're done with your short, when you buy back to the market after the t2 settlement, you return the shares so shares on loan very, very correlated with the short shares, but not exactly the Same thing, but anyway i digress for the length of time that shares have been on loan. It's just been running sky-high back on march 24th.

It was 11 days now they've been in for 47 days, so it's safe to assume that on average, the shorts betting against gme have been in the position for almost two months and as i'm filming this we are currently in mid-june. So that means we got to go all the way back kind of till mid-april, so this tells me that the average short got in somewhere around 150 160. So even given today's drop, they are still under water, but wait it doesn't stop there. Don't forget not only are they underwater based on the stock's price, but they've also been paying a borrow fee every single day, that's referred to cost, to borrow so on two different metrics.

The people betting against jimmy have been having money. The stock is higher and they're paying that borrow fee and even with all that being said, don't forget how far gme has come. I get that today was not the best day it hit me in my stomach too. I own gme, calls and gme shares.

This was not the best day to endure, but i still am holding my head high. Don't forget that from the start of 2021, until now, gme is up over a thousand percent, and ever since its most recent rally here, starting on may 11th, the stock is still up a very noteworthy 61. I think a lot of people when we get into this. You look at the one day action and i get it i'm right there with you.

I want every single day to be green. Unfortunately, that's just not how the stock market works so when in doubt, zoom out understand the trend at large and in my opinion, this really isn't too different than what we've been seeing in amc. It looks like we're forming a giant cup and handle so right here. We tagged 348 back on march 10th and then right here we uh got to 3 44 on june 8th.

It looks like we're forming a giant cup and then this is followed by another smaller cup. So one big: u followed by another, smaller? U and then the explosion upward. Once again, this is exactly what we saw pretty recently. Let me zoom in just so.

We can see this better look at the cup and handle we had on amc. It went from 1450 to 1450, it took a hit and then a couple days later it built back up and exploded. What this is just how cup and handles play out. Do they play out this like this? A hundred percent of the time? Absolutely not, but it is definitely a bullish pattern.

So that's what i'm looking for in terms of technical support. We are getting very, very close to one so at 200. I think this is the magic price level. We have this trend line.

We have previous resistance, which i'm expecting to act as support, and it's also a key psychological level. So that's three things right: there trend line previous resistance, turning into support and also the psychological level. I bet that there's going to be a lot of price action at this 200 mark and i i'm personally willing to buy more gme right at that price point just because, even if you take a look at the rsi, it's so incredibly oversold right here on the Bottom, we have the relative strength index and it maps out momentum when it gets very high. That's a lot of bullish momentum when it gets very low.

That's a lot of bearish momentum. There's a lot of day traders a lot of investors who use this for reversion place. So not only are we down, but it's so low that i believe there's going to be a lot of people stepping in who just look at this as a nice reversion opportunity. So when you pair this technical with the trend line, the support and the fact that 200 is a key psychological level, i am personally confident with putting my money at stake on gme, putting more of my money at stake at that 200 mark.

So, overall, that's what's going on with gme and an earnings announcement it kind of took a hit because they offered no guidance and on top of that there they announced a new 5 million sure at the market offering, but from a technical perspective. I i see why the public reacted negatively to it, but when you take into account the short interest and what's going on on the chart, i think this actually presents us with a pretty interesting opportunity. Obviously, with all that being said, i'm not a financial advisor. These are just my own opinions and i would love to get your thoughts on gme in a comment below.

If you enjoyed this video - and you want to help me out with the youtube algorithm - don't forget to drop a like, and if you want to be a member of the moon gang where we talk about stocks options in crypto, all you have to do is hit That subscribe button until i catch you next time from me and share best of luck in the markets. You.