Is GameStop Stock Going to $0?
To answer the headline off the bat, no, 's (NYSE: GME) stock is not going to $0 anytime soon.
The reason is that it has a fortress of a balance sheet. It has $9 billion in cash and marketable securities to go along with another nearly $370 million worth of Bitcoin. Meanwhile, its nearly $4.2 billion in debt is in the form of convertible notes that pay 0% interest and can be settled in stock.
That said, the stock could have a lot of potential downside from here. The company has a market cap of over $11 billion and an enterprise value (EV) of around $6.5 billion. If, instead of using a price-to-earnings (P/E) ratio, we use an EV-to-earnings ratio because of GameStop's large cash position, the stock trades at a multiple of about 15.5. For a company that saw declining revenue last year, that's a pretty healthy multiple.
Source Fool.com
