Market Lessons: What a GameStop flop can teach you about investing strategy

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'The price seemed so low that it felt like even at a moderate outcome for the company, you could still make a lot of money.'

Market Lessons is a series that explores the biggest wins, losses and lessons across a variety of investor experiences. We spoke to Rob Khazzam, chief executive officer and co-founder of– the one that would be a part of what is known as the meme stock phenomenon – Khazzam saw opportunity with the video game retailer.

GameStop announced a strategic review in 2018 that included discussions with third parties about a potential sale of the company. With $820 million in debt on the balance sheet, anBut that didn't happen. Less than a year after it started the strategic review, GameStop ditched its pursuit of a potential sale, citing "a lack of available financing on terms that would be commercially acceptable to a prospective acquirer.

"I was not a holder at the time, unfortunately," Khazzam said. "But investing in GameStop was still a good lesson."Just because you see opportunity for a company doesn't mean that management is going to be on the same page as you. While Khazzam's investing strategy has shifted since the GameStop buy, he recommends investors to understand companies and their pricing, relative to other businesses in the same industry.

Bears like JPMorgan and bulls like Fundstrat remain split on what looms for markets in October, with some strategists eyeing a rebound in earnings.Every Canadian should own the TSX’s dividend pioneer to help cope with inflation and receive uninterrupted income streams. The post This 5.13% Dividend Stock Is One Every Canadian Should Own appeared first on The Motley Fool Canada.Ideally, you should have multiple income sources by the time you retire to remove the strain on government pensions.

 

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