Billionaire on GameStop This is not going to end well for the public

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That old gravitational pull for stocks hasn’t disappeared. It’s called reversion to the mean—and it’s not a lot of fun for investors in high-flying shares whose fundamentals stink. Reality eventually intervenes. Watch that happen to GameStop.

Right now, the videogame retailer is held aloft thanks to the Robinhood/Reddit crowd, who have piled into the stock, partly to stick it to the financial establishment. Hedge funds that have sold GameStop short have had a punishing experience lately. But will this fad persist for the long pull. Ummmm, doubtful. Look for that huge share price to descend big time.

The basic problem for GameStop as a business is that it depends upon customers coming to physical stores and, yes, stopping there. But as market research firm Place.ai noted in a recent report: “We don’t need a video store to buy video games.” Foot traffic at the company’s stores has been on a steady decline, the firm stated, dipping 2.9% in 2019 and a scary 27.3% last year.