Weekly Wrap: GameStop's Return, Money for Gas, Job Potential

Gaming GameStock

Remember the good old days of the meme stock explosion?

That would be January 2021. Roaring Kitty led the charge of investors to buy GameStop (GME), AMC Entertainment Holdings (AMC), and the like. As a result, GameStop shares soared 1,700 percent in one month.

Conventional stock analysts needed psychoanalysts to deal with the upheaval.

Déjà vu All Over Again

Game Stop’s price rise from mid-March 2022 to today might make you think history is repeating itself.

The meme stock was trading at $78 a share on March 14. However, it took off from there. By March 23, it had peaked at $150 a share before closing at $140 a share. All told, over 24 million shares were traded that day.

Currently, GameStop closed Friday at $146.19 a share. However, that could change dramatically at any time. The stock price for Game Stock has been anything but stable.

Meme Attack

Meme stocks rocketed to incredible highs and plummeted to incredible lows in 2021. The run-up in these stocks was largely fueled by groups on social media.

One such group, r/WallStreetBets, took to Reddit last year to tout the potential of GameStop. The group’s efforts pushed the price of GameStop stock to $300 in June.

Most Wall Street professionals were baffled by the GameStop rally because the company’s fundamentals did not justify it. However the same can be said of most growth stocks. In fact, Motley Fool recently asked if meme stocks are the new growth stocks

Fundamentals Still Shaky

The most recent runup in GameStock also defies fundamentals. Its fourth-quarter earnings report showed a gain in revenue that exceeded projections by two percent. However, the firm’s gross margin dropped about four percent resulting in a loss.

For a retailer to lose money during the holiday season is disastrous. In addition, GameStop’s management did not offer a financial outlook. As a result, the stock dropped eight percent.

New Leadership, New Plan

Even with its financial body blows, GameStop is still standing. In fact, the stock price has grown as mentioned above.

Much of the faith in GameStop is based on its new leadership and new game plan.

Last summer, amid the initial GameStop craze, a slate of new executives and board members took the company’s helm. They announced plans to move more of the firm’s business online and seek new investment opportunities.

One of those opportunities is an NFT (Non-Fungible Token) marketplace. The beta version of that marketplace is now in operation. The full launch is expected soon.

GameStop seeks to compete by offering in-game digital assets and NFTs at lower rates than other platforms.

GameStop has partnered with Loopring to meet that goal. Loopring is a software company that uses a newer type of cryptography called zero-knowledge rollups, or zkRollups. That cryptography is designed to increase the speed and reduce the costs of decentralized exchanges on Ethereum.

If GameStop’s marketplace is successful, the company could move from being the object of speculation to being a proven performer.

Targeted Job Growth In Trek Back to the Office

More people are transitioning back to the office as COVID fears ease and jobs rise. As a result, employment opportunities continue to open — especially in several beleaguered sectors.

The American economy added 431,000 jobs in March, according to the Bureau of Labor Statistics, and dropped unemployment to 3.6 percent.

The numbers varied from expectations slightly. Analysts surveyed by Dow Jones had been projecting 490,000 new jobs with unemployment of 3.7 percent.

Where the Jobs Are

Leading the pack in new jobs was the leisure and hospitality industry. That sector added 112,000 new jobs in March. That is over 25 percent of the total. Hotels, Restaurants, and amusement parks are included in this category.

Leisure and hospitality is the sector most severely impacted by the pandemic.

Over 80,000 restaurants closed during the pandemic, according to the National Restaurant Association.

Today, employment is 8.7 percent below pre-pandemic levels. Even though the industry has seen 15 straight months of job growth.

Close behind leisure and hospitality in job growth was business and professional services. Here, accounting and bookkeeping jobs lead the way. Bean counters made up 18,000 of the 102,000 new hires in this sector. However, management consultants and computer systems designers accounted for 15,100 and 12,300 jobs respectively.

Leaving Home

Another trend the Labor report reveals is the return to the office.

About 10 percent of Americans worked from home due to COVID concerns in March, according to the Labor Bureau’s report. That is down three percent from February.

The May 2020 jobs report showed 61 percent of employees were working from home.

However, the number of people working from home prior to the pandemic and ongoing is not reflected in the Bureau’s report.

Gas Stimulus Proposed

Even with additional supply released from the national reserve, gas prices are high and a major expense for most Americans. As a result, there is a movement in Congress to issue monthly stimulus checks to help you cover that expense.

According to a survey by Workhuman, 61 percent of respondents cite commuting expenses (including gasoline) as a concern. However, help may be on the way.

Gas Rebate Act of 2022

The proposal, titled the Gas Rebate Act of 2022, is sponsored by three Democrats in the House of Representatives. Reps. Mike Thompson (D-CA), John Larson (D-CT), and Lauren Underwood (D-IL). Their bill would give Americans a $100 per month rebate.

Under the plan, checks would be issued in any month in which the national average of gas prices exceed $4 per gallon. In addition, there would be another $100 payment per dependent.

For example, a family of four would get $400.

Gas prices have already topped $4 this month. That means everyone eligible would get a check if the rebate was law today.

Eligibility for the rebate would mirror the guidelines for last year’s stimulus payments. As a result, married couples filing jointly and earning under $150.000 annually would get the full payment. For single filers, the threshold is $75,000 and under.

States Issuing Rebates

So far, five states have enacted measures to help their residents with gas or other expenses.

Idaho began sending rebates to residents last month. The checks total $75 or 12 percent of state taxes.

Other states, including Georgia, New Mexico, New Jersey, and Indiana are sending checks ranging up to $500 to their residents.

In addition, several other states are considering stimulus measures.

Will It Pass

No one knows if the Gas Rebate Act of 2022 will pass both houses of Congress. However, with many families caught between the gas pump and a hard place, any assistance would help.

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Max Erkiletian

Max K. Erkiletian is a seasoned journalist and analytical reporter with nearly 40 years of experience. He has been nominated for several honors and was part of a team that won the Missouri Press Association’s Community Service Award.

His experience has included covering a wide range of topics, from crime reporting to politics and music. His interview subjects have included U.S. Senators, such as Tom Eagleton; economists, such as Arthur Laffer; former Fed Chair Paul Volcker; and musicians, such as Muddy Waters and B. B. King.

Today, he focuses on personal finance, consumer protection, economic shifts, and investment trends. His reporting aims to make complex issues understood and show how events impact consumers’ wallets.