What GameStop Might Really Be Worth
The week ahead
Earnings season picks up pace, with more than a fifth of SP 500 companies reporting this week. They will hope to keep up a streak of better-than-expected results: More than 80 percent of firms have beat fourth-quarter profit forecasts thus far, according to FactSet.
Among the notable reports are Alphabet, Amazon, BP, Exxon and Pfizer on Tuesday; Apollo and Qualcomm on Wednesday; and Deutsche Bank, Ford, Shell and SoftBank on Thursday.
Kuaishou, a hugely popular video-sharing app in China, is set to raise more than $5 billion in a Hong Kong listing on Friday, the largest I.P.O. in over a year.
The U.S. jobs report on Friday is expected to show a gain of 50,000 jobs in January, only partially reversing the loss of 140,000 positions in December.
‘That is how the game is played’
At the center of the meme-stocks frenzy is Reddit, whose WallStreetBets forum was the birthplace of the trade that pushed shares in GameStop to dizzying heights. The message board operator’s C.E.O., Steve Huffman, joined Kara Swisher for the Times Opinion podcast “Sway,” and had a lot to say about his company’s role in the melt-up. Two of his main points:
There’s not much Reddit can do. When pushed on the company’s responsibility to protect users from the market frenzy, Mr. Huffman compared trading to other dangerous activities. “I would be worried if people were jumping off a cliff into a river as well,” he told Kara.
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Users are simply voicing opinions, according to Mr. Huffman, and that’s legal: “I’m not even sure what gates we would put in place.”
Reddit is no different from the media. When asked about how his company’s forums could be used to spread disinformation, Mr. Huffman said his company was acting just like established financial media outlets:
I would make the exact same criticism of CNBC, of any financial newsletter. That is how the game is played. People have their theories. They have their desires. They have stocks that they’re pushing. They go on TV. They go on newsletters. They write newsletters. They go on forums.
THE SPEED READ
Deals
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Shares in companies affiliated with HNA, the once-highflying Chinese conglomerate, slumped as creditors sought to push their parent into bankruptcy. (Reuters)
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Last month set a record for I.P.O. offerings, thanks to SPACs. The C.E.O. of the London Stock Exchange said that making the city more attractive to blank-check funds could help it maintain its hub status after Brexit. (Bloomberg, Reuters)
Politics and policy
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The Paycheck Protection Program has been revived, but researchers say the lending program saved relatively few jobs. (NYT)
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The Jan. 6 rally in Washington that preceded the Capitol riot was funded largely by the heiress to the Publix supermarket chain, a top donor to the Trump campaign. (WSJ)
Tech
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Inside the demise of Mt. Gox, once a huge Bitcoin exchange. (Bloomberg)
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Winners of a federal auction for 5G spectrum, which attracted $81 billion worth of bids, are expected to be announced soon. (CNBC)
Best of the rest
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The shocking tale of one man’s hunt for the person destroying his and his family’s reputations — and many, many others — online. (NYT)
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“How Women Are Changing the Philanthropy Game” (NYT)
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Forget the Ivy League: The C.I.A. is trawling Twitter and LinkedIn to recruit millennial and Gen Z agents. (WSJ)
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Article source: https://www.nytimes.com/2021/02/01/business/dealbook/gamestop-trading-valuation.html