Brian Sozzi gives his latest hot take on GameStop's September slump driven by a slowdown in sentiment amongst investors and what this could mean for this meme stock moving forward.
EMILY MCCORMICK: Welcome back to Yahoo Finance Live. Time now for some hot takes from Brian Sozzi and myself. Brian, you're looking at GameStop's latest drawdown in September. Now this stock, of course, had been a darling of that WallStreetBets' Reddit trade earlier this year, but it looks like some of that enthusiasm may be fading. What's your take on this move?
BRIAN SOZZI: Well, if we're just going by the Twitter reaction since I posted this story on "Yahoo Finance" yesterday, late yesterday afternoon, I would say the enthusiasm amongst the hardcore-- the hardcore-- of GameStop fans remains intact. There's a lot of their responses I can't really discuss here on air, Emily, but yeah.
So so far, September, to date, has been an awful month for GameStop. Any way you slice it, I mean, the stock is down about 12 and 1/2% month to date according to our data. The S&P 500 is down slightly-- about 2%-- over that same time span, so GameStop shares are underperforming on a relative basis versus the S&P 500.
A couple of things going on here. I will actually mention real quickly too, the stock is down 46% since hitting a record high on Jan 27. A couple of things going on here, Emily. First is the action on GameStop appears to be slowing down on WallStreetBets. And this is more. I get into more on this in my piece now on "Yahoo Finance." But really, Redditors are talking less about GameStop on WallStreetBets for whatever reason.
Also, internet mentions of GameStop have crashed since mid-August. Shout out to the fine folks at Swaggy Stocks which they track social media sentiment on WallStreetBets. I really enjoy that site. So really, sentiment has fallen pretty drastically on GameStop. Less people are talking about it. And I think part of the reason why, Emily, they are talking about it less, you want to talk about, perhaps, people going back to work, kids back in school, perhaps a little bit less meme stock retail trading. I understand.
But also too, let's keep in mind. GameStop just reported earnings a couple of weeks ago. They held about a 20-minute earnings call. No real guideline or path forward on what they plan to do. You have the new CEO there in Matt Furlong. You have Ryan Cohen out there in terms of executive chairman. What do you plan to do to justify the valuation your company now trades at? They have effectively said nothing to anyone. There meme stock lovers, the institutional investors that are still involved in the stock, they said squat.
So I think you are seeing a little bit of a meme stock revolt against GameStop not telling folks what they plan to do to save the company.
EMILY MCCORMICK: Really good points, Brian. I mean, like you mentioned, really is kind of this dual-sided argument here for why we are seeing this drawdown a bit now for GameStop. Like you mentioned, there are those fundamental arguments. And then, of course, as you mentioned, we did have a number of strategists earlier on in the spring and summer talking about the fact that once a lot of these retail traders who have just gotten into the market go back to work in person, aren't necessarily able to log on and check their brokerage accounts throughout the day, that is something that could impact that retail participation.
And of course, not definitive at this point whether that's really what's going on here, but as you said, we can at least observe that those decreases and mentions on WallStreetBets.