Why is the financial press putting poor fourth quarter 2020 GME earnings on blast?? Analysts predicted in early 2020 that company earnings for 2020 would suffer due to Covid. The financial press have consistently missed the mark with the revolution of GME. People please watch The Big Short and see how complicit the mainstream financial press are with entrenched Wall Street. For a demonstration of what “Earnings calls” are check out The Smartest Guys in the Room. Let’s break some of this down.
Earnings Season
All publicly traded companies disclose (report) earnings. Publicly
traded companies report how well they did 3 months AFTER they did it. (Earnings
= doing) Companies tell investors what they think they will DO (make money,
lose money, remain flat), then they try and DO that. Later (the next financial quarter),
they have a meeting or call (used to be on the phone) and tell everyone if they
DID that. If the earnings report is good, bad, neutral – then investors decide
what they will do next (buy, hold, sell)
Do good companies sometimes report bad earnings?
All the bloody time.
In 2019, Pfizer lost market value of between $33-218 billion in 2019. That same year, Walgreens Boots Alliance lost between $13-52 billion in market value. Pfizer’s 2020 earnings were better than 2019 and 2021 looks substantially better. Walgreens has really amazing projections for earnings (profitability) in 2021 And I loved Boots when I lived in London!
Let GameStop make its adjustments!
If this experiment with GME is a simulation, what are we
learning?
We are learning how the enemy protects its advantage. We are
learning that there is DEEP dislike with the GME revolution - prompting bad
press and sell trades on GME. Okay and the fundamentals may call for that.
However, many, many other companies have been through this cycle and recovered. Focus on the changes GME (or any company) is making and ask if it is enough to change the trajectory of its profitability or earnings.
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