Dividends and GameStop looks to capitalize on Reddit-driven rally

One of the reasons more individual investors are investing in the stock market is Reddit, which people chat about things. Other reasons are a bull market, low commissions, and keeping up with Jones, (you hear or see what other people in your age group are doing and wonder should I do the same thing?). If you remember, GameStop which is a traditional store front in malls selling video games. It is important to remember gamers size is similar to the entertainment industry – worth billions. One of the advantages of the internet is everyone has access to information, it is a little dauting at first to find it, but once you are used to it, the information is available to read and analyze. People were posting on Reddit about GameStop and many people bought stock and options and some made money as the price went from $19 to $347 and has settled in the $185 range will swings every once in a while.

In an article by Uday Sampath Kumar and Joshua Franklin of Reuters, the management of GameStop announced it will sell stock from $100 million to $1 billion to capitalize on the trend to owning its shares.

Every company to grow needs to raise money – it can be short term notes, sell bonds, issue stock, access lines of credit and something in between or combination. The company goes to investment bankers who for a fee help raise whatever the market is looking for at a good price for the company and investors.

GameStop with the money could transform its business becoming the digital go to company for games or invest in services for Gamers or some new businesses and it may one day be valued at the prices the stock is. One can hope or dream and watch how they can execute a business plan.

Linking to dividend paying stocks, fortunately these companies have the most options when it comes to how markets are doing and what the appetite for investors are. When stock prices reach new highs it is a good thing to sell more stock and when prices fall, the company can buy back the stock, the company can do bond issues; the important aspect is more the company to take advantage of what the markets of the world are giving them. If not, one has to question management of why they did not take advantage of opportunities?

There are more questions than answers, till the next time – to raising questions.

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