Beiträge

Veröffentlicht am

GameStop, AMC stocks remain ‘dangerously overvalued’: Analyst

  • AMC Entertainment Holdings and GameStop Corp. were among the most popular meme stocks last year, with prices driven up by retail buyers

  • GameStop is miles off its 2021 peak of $483, while shares of AMC Entertainment are similarly off the highs of $72.62.

Shares of “meme stocks” GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC) are down roughly 36% and 44% year to date after a brutal few weeks in the markets.

While the stocks saw a huge bounce on Friday, an analyst says the sell-off witnessed since the market frenzy of 2021 isn’t over for these stocks.

He predicts more pain amid investor pivot into profitable companies or other investment niches like metaverse and NFTs.

No profits and “untethered from reality”

Meme stocks exploded onto the scene in 2021, rallying to massive heights alongside Bitcoin and other cryptocurrencies. As crypto has tanked, the stocks have tumbled too- with more losses to come according to analysts.

David Trainer, the CEO of investment research firm New Constructs says GameStop and AMC are set for more selling, with the companies unlikely to be profitable over the next two years.

Trainer explains that investors might look elsewhere for profitable deals as they steer away from stocks that put portfolios at the unnecessary risk of devastating declines.

According to the analyst, while investors might want to look at the valuation of companies they invest in versus their profitability, the metric doesn’t really apply to most meme stocks.

He notes that investors are likely to see no problem in paying a premium to get an investment in a company with strong profits. Pointing out GameStop and AMC Entertainment as two of the most popular, he said the two have valuations that “remain untethered from reality.”

“Meme stocks like GameStop and AMC Entertainment remain dangerously overvalued and don’t generate anywhere near the profits necessary to justify their current valuations,” he added.

Potential investment trends to see more inflows as investors continue to rotate out of meme stocks are metaverse and NFT linked companies.

Wall Street targets for GME and AMC stocks

The GameStop stock closed at $97.91, up 4.8% on Friday while AMC shares traded up 3.7% to $15.06. While positive on the day, a look at the monthly logs shows the extent of the stocks’ declines.

Data from MarketWatch shows GME is down 69% in the past twelve months, while AMC is sharply down year to date at -44% to cut yearly gains to just 13%. Over the past 30 days, GME prices are down nearly 37% as AMC’s have shed nearly 48%.

Wall Street has an average price target of $8.17 for AMC Entertainment, representing a 45.75% downside from current levels. 

TipRanks also shows that 4 analysts have an average price target of $34.00 for GME, suggesting an expected 65.27% drawdown from Friday’s close of $97.91.

The post GameStop, AMC stocks remain ‘dangerously overvalued’: Analyst appeared first on Coin Journal.

Veröffentlicht am

Visa says its crypto-linked card payments hit $2.5 billion in Q1

  • Visa processed $2.5 billion in crypto payments in the three months ended 31 December

  • 65 platforms and exchanges have teamed up with Visa, including Coinbase and BlockFi

  • CEO Al Kelly said the payments giant “will continue to lean into the crypto space.”

Visa customers used their crypto-linked card to make payments totaling $2.5 billion during the global payments firm’s fiscal first quarter of 2022 ended 31 December.

The company processed transactions worth $46.7 billion during the quarter, an increase of 21% on the volume reported in the same quarter a year ago.

The amounts pushed the electronic funds transfer behemoth’s crypto volume to 70% of what was recorded in the fiscal year 2021, CEO Al Kelly said in an earnings call.

According to the Visa chief, the massive jump in payments made via the company’s crypto-linked cards came as the number of platforms and exchanges signing up with them soared from 54 to 65.

Some of the big-name candidates on the network include crypto exchange Coinbase and BlockFi- a US-based crypto wealth management provider.

Merchants who accept Visa-linked crypto payments have also increased significantly, hitting 100 million during the quarter, the company said in its earnings statement.

Kelly noted that the credit card payments giant “will continue to lean into the crypto space,” as they look to help the sector grow. Part of Visa’s strategy for this, he explained, is to enhance partnerships that help ensure connectivity, reliability, and security, with an eye to scaling services and value proposition to customers.

Visa chief financial officer Vasant Prabhu said the growth in crypto-linked card payments is a signal that users see the utility in the offering, CNBC reported. 

He pointed out that customers are increasingly finding value through access to liquidity and instant, seamless purchases.

The Visa CFO also noted that volumes continued to rise despite the slump in crypto markets. He also added that the payments were spread across various merchant verticals, including at retailers, restaurants, and travel.

The company has no crypto holdings but has increasingly looked to support merchants and platforms. In December, it announced a crypto advisory service that targets helping institutions and merchants.

According to the company, this is due to the growing adoption of crypto across payments. The service also aims at helping customers seeking to explore the non-fungible tokens (NFTs) space and central bank digital currencies (CBDCs).

The post Visa says its crypto-linked card payments hit $2.5 billion in Q1 appeared first on Coin Journal.

Veröffentlicht am

Demand-supply dynamics will send Bitcoin and Ethereum prices higher: Bloomberg analyst

  • Mike McGlone says Bitcoin and Ethereum prices could rally higher given their respective supply-demand dynamics.

  • Bitcoin price has bounced from weekly lows of $33K to trade around $38,700, while Ethereum looks to strengthen above $2,600 after bouncing off lows of $2,200.

  • Crypto has traded in lockstep with stocks amid headwinds associated with US Federal Reserve’s monetary tightening.

Bloomberg commodity strategist Mike McGlone believes the prices of Bitcoin (BTC) and Ethereum (ETH), the top two cryptocurrencies by market cap today, are yet to peak.

According to the analyst, the two cryptocurrencies are still in “early adoption days.” 

His suggestion? The potential for future price gains remains high as networks see more growth.  

He points to the increasing demand for the digital assets versus their respective declining supply and believes these could be key metrics in projections of further price implications.

Bitcoin has a fixed supply of 21 million while Ethereum’s recent upgrades have seen millions of dollars worth of ETH burned as the network looks to a supply cut.

“By the rules of economics, a market with rising demand and declining supply will go up over time, suggesting that Bitcoin may be forming a bottom again around $30,000 as $60,000 resistance ages,” McGlone said in an earlier comment.

As for Ethereum, he says bullish fundamentals remain intact even as price continued to fluctuate in the $2,000-$4,000 range. The price range, he notes, has bulls buying the dip while sellers try to defend the $4K barrier.

McGlone, however, says that “something unlikely [that] reverses the proliferation of the nascent [crypto] technology” would be bad for crypto markets.

Bitcoin’s lockstep trading with stocks

The analyst’s projections come at a time when crypto markets have traded more in lockstep with traditional financial markets.

Since the start of the year, Bitcoin price has fallen and bounced in tandem with returns on Wall Street, with sentiment seemingly hinged on the US Federal Reserve’s hawkish tilt amid rising inflation.

Bitcoin price has bounced from this week’s low of $33,000 to highs of $38,780 on 30 January, its weekly gains currently at 8%. Ether (ETH) has also rebounded from seven-day lows of $2,200 to trade around $2,600.

The weekend uptick comes after similar recoveries on Wall Street on Friday. The Nasdaq closed 3% higher and the S&P 500 edged +2.4% to claw back some of the weekly losses.

The post Demand-supply dynamics will send Bitcoin and Ethereum prices higher: Bloomberg analyst appeared first on Coin Journal.