GameStop Flounders but Long-Term Catalysts Remain Intact

GameStop has deepened its technology-fueled strategy as it looks to revive its outdated brand. The gaming retailer has named Amazon alum Matt Furlong, who it recently tapped as CEO, to its board of directors, with immediate effect.

GameStop is looking to harness Furlong’s experience at the e-commerce giant, including his former roles as technical advisor and head of Amazon’s North American consumer segment. He also spearheaded Amazon’s Aussie business “during a period of substantial growth,” according to Furlong’s LinkedIn profile.

Low Volume, Low Conviction

The stock is taking it on the chin in the short term, with shares down more than 6% today. The company’s new digital push, however, could have long-term benefits for the fundamentals as well as the stock price. Trading volume in the stock is lower than usual, with 3.7 million shares changing hands vs. an average of nearly 10 million. Summer trading might have gotten a jump start this year.

GameStop continues to capture the attention of the WallStreetBets crowd. They have made GME one of their most talked-about names today, surpassed by fellow meme stocks BlackBerry, AMC Entertainment and Clean Energy.

GameStop in Your 401(K)?

Meme stocks are starting to pop up in exchange-traded funds, which are popular investment vehicles in retirement schemes such as 401(K) plans. According to a recent report in The Wall Street Journal, investment firms behind actively managed ETFs are jumping on the meme-stock bandwagon in hopes of capturing some of the windfall fueled by retail investors. A couple of these funds include:

• Qraft AI-Enhanced US Next Value ETF

• The US Small-Cap Adaptive Multi-Factor ETF by Principal Financial Group

Considering that these funds are actively managed, the portfolio managers are hoping to use their stock-picking skills coupled with technology to ride the meme stock wave before it comes crashing down.

For its part, Qraft uses AI to help time its investments, and it targets value stocks. Meme stock leaders GameStop and AMC recently made their way onto the algorithm’s leading 100 stocks for the month. Principal Financial, meanwhile, takes a quantitative approach, involving more human intervention. GameStop is currently the biggest holding in Principal’s small-cap ETF.

If GameStop succeeds in looking more like Amazon than a brick-and-mortar retailer, shares might not skip a beat when the meme stock craze is eventually over.

This article was originally posted on FX Empire

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