Stocks Set To Continue Crashing After Worst Selloff Since 2020: Tariff Announcement Was '100% Smoot Hawley Disguised As Thoughtful Policy,' Says Expert
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 04 2025
0mins
Source: Benzinga
Market Reaction to Tariffs: U.S. stock futures fell sharply following President Trump's tariffs announcement, with the Dow Jones experiencing its fifth-largest drop ever, while major indices like the S&P 500 and Nasdaq faced significant losses. Trump downplayed the market's reaction, predicting future growth despite the downturn.
Sector Performance and Economic Data: Technology stocks were hit hardest, with notable declines in companies like Apple and Amazon, while consumer staples showed resilience. Mixed economic data was released, showing a decrease in jobless claims but a decline in the ISM services PMI, indicating varied economic signals amidst the market volatility.
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Analyst Views on GME
About GME
GameStop Corp. offers games and entertainment products through its stores and ecommerce platforms. The Company operates in four geographic segments: United States, Canada, Australia and Europe. Each segment consists primarily of retail operations, with the significant majority focused on games, entertainment products and technology. The Company has a total of approximately 3,203 stores across all of its segments: 2,325 in the United States, 193 in Canada, 374 in Australia, and 311 in Europe. Its stores and ecommerce sites operate primarily under the names GameStop, EB Games and Micromania. Its Australia and Europe segments also include 38 pop culture-themed stores selling collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers in international markets operating under the Zing Pop Culture brand. Its retail stores are generally located in strip centers, shopping malls and pedestrian areas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
GameStop's M&A Speculation Sparks Market Interest
- Stock Price Movement: GameStop (GME) opened with a 5.8% increase on Monday as speculation around Ryan Cohen's M&A strategy intensifies, with morning trading volume exceeding 2.2 million shares, indicating a potential above-average trading day.
- Cohen's Stock Options: Ryan Cohen holds a nonqualified stock option grant for 171,537,327 shares of Class A GameStop (GME) at a strike price of $20.66 per share, contingent on achieving aggressive market cap and EBITDA targets, highlighting his ambitious growth strategy.
- Market Speculation: Over the weekend, Seeking Alpha subscribers speculated on potential M&A targets for GameStop, including well-known consumer companies like Five Below, Western Union, and Nintendo, reflecting high market interest in the company's strategic direction.
- Short Interest Ratio: GameStop's short interest stands at 14.7% of the total float, indicating mixed investor sentiment regarding its future performance, as cautious investors weigh the implications of Cohen's plans, which could lead to increased stock volatility.
See More
GameStop Shares Surge 8% Amid Acquisition Speculation
- Stock Surge: GameStop shares jumped over 8% on Monday, marking the sharpest increase in eight months, reflecting positive market sentiment towards its acquisition plans and pushing the stock up 29% year-to-date.
- Acquisition Strategy: CEO Ryan Cohen indicated that GameStop is eyeing a 'big' acquisition in the public retail sector, leveraging nearly $9 billion in cash reserves to pivot the business and enhance stock value, demonstrating a strong commitment to strategic transformation.
- Investor Confidence: Notable investor Michael Burry recently disclosed a long position in GameStop and suggested several potential acquisition targets, including ADT and Wayfair, which further boosted market optimism, as evidenced by rising sentiment on Stocktwits.
- Market Speculation: Stocktwits users actively discussed potential acquisition targets such as eBay, Corsair Gaming, and Peloton, indicating strong retail investor engagement and interest in GameStop's strategic direction.
See More
Silver Price Volatility Sparks Market Attention
- Increased Market Volatility: Silver prices have surged over 100% in just three months, prompting market observers to question whether it has become a 'meme asset,' indicating that retail investor behavior is significantly influencing price movements.
- Significant Fund Inflows: On January 26, individual investors poured approximately $171 million net into the iShares Silver Trust, nearly double the previous peak during the 2021 'silver squeeze,' highlighting a growing enthusiasm among retail investors for silver.
- Social Media Influence: The Reddit Silverbugs forum is active with users sharing purchase experiences and price targets, reflecting the impact of meme culture on the silver market, especially after sharp price fluctuations, leading to more unstable investor sentiment and behavior.
- Analysts Warn of Risks: Rhona O'Connell, head of market intelligence at StoneX, cautioned that silver prices have detached from sustainable levels, posing a risk of price crashes, and advised new investors to be cautious to avoid losses due to market sentiment volatility.
See More
Michael Burry Sees GameStop's Acquisition Potential
- Acquisition Strategy Insight: GameStop CEO Ryan Cohen's pursuit of an undervalued consumer company signals a strategic shift, with Burry noting that the company has the financial muscle, particularly with $6.1 billion in net cash, to pursue significant acquisitions.
- Potential Target Companies: Burry identifies ADT as the top acquisition target due to its cash flow and customer relationships, while Wayfair ranks second for its logistics infrastructure, indicating GameStop's intent to diversify its investment portfolio.
- 'Instant Berkshire' Strategy: Burry suggests Cohen may adopt an 'Instant Berkshire' approach, acquiring multiple companies to create a portfolio that generates excess capital for further investments, thereby enhancing GameStop's competitive position in the market.
- Positive Market Reaction: GameStop's stock rose 7% to $25.73, reflecting market optimism regarding its acquisition plans and reinforcing its image as a cash-rich holding company poised for new growth opportunities.
See More
Analysis of Store Openings and Closures in U.S. Retail Sector
- Increase in Store Openings: Coresight Research projects that U.S. retailers will open approximately 5,500 new stores in 2026, representing a 4.4% year-over-year increase, indicating that value retailers are effectively attracting consumer spending and reflecting sustained demand for low-cost goods.
- Decrease in Store Closures: It is expected that about 7,900 stores will close in 2026, a 4.5% decline from the previous year, marking the lowest number of closures in the past three years, which suggests signs of recovery in the retail sector post-pandemic.
- Impact of Bankruptcies: Last year, 32 retailers filed for bankruptcy, leading to significant store closures; however, affluent consumers continued to support retail growth, highlighting the ongoing K-shaped recovery in the economy.
- Tightening Real Estate Market: With a slowdown in bankruptcies, retail real estate demand is expected to tighten, particularly in major retail markets, as retailers compete for limited commercial space, potentially leading to rising rents in the coming years.
See More
US Retail Store Closures Decline as Industry Stabilizes
- Decline in Store Closures: It is projected that U.S. retailers will close approximately 7,900 stores in 2026, representing a 4.5% year-over-year decrease, marking the lowest closure rate in three years as the retail sector moves past a wave of bankruptcies.
- Increase in New Openings: According to Coresight Research, U.S. retailers are expected to open about 5,500 new stores in 2026, a 4.4% increase year-over-year, indicating the continued appeal of value-focused retailers in attracting consumer spending.
- Supply and Demand Dynamics: As demand for retail space rises and supply diminishes, developers may find renewed opportunities to construct new strip malls, potentially revitalizing the retail landscape and driving future growth.
- Economic Factors at Play: Coresight's global research head anticipates that while high inflation and a sluggish housing market continue to impact retail, these economic pressures are expected to ease over the coming year, leading to improved real estate plans for retailers.
See More
GameStop's M&A Speculation Sparks Market Interest
- Stock Price Movement: GameStop (GME) opened with a 5.8% increase on Monday as speculation around Ryan Cohen's M&A strategy intensifies, with morning trading volume exceeding 2.2 million shares, indicating a potential above-average trading day.
- Cohen's Stock Options: Ryan Cohen holds a nonqualified stock option grant for 171,537,327 shares of Class A GameStop (GME) at a strike price of $20.66 per share, contingent on achieving aggressive market cap and EBITDA targets, highlighting his ambitious growth strategy.
- Market Speculation: Over the weekend, Seeking Alpha subscribers speculated on potential M&A targets for GameStop, including well-known consumer companies like Five Below, Western Union, and Nintendo, reflecting high market interest in the company's strategic direction.
- Short Interest Ratio: GameStop's short interest stands at 14.7% of the total float, indicating mixed investor sentiment regarding its future performance, as cautious investors weigh the implications of Cohen's plans, which could lead to increased stock volatility.
See More
GameStop Shares Surge 8% Amid Acquisition Speculation
- Stock Surge: GameStop shares jumped over 8% on Monday, marking the sharpest increase in eight months, reflecting positive market sentiment towards its acquisition plans and pushing the stock up 29% year-to-date.
- Acquisition Strategy: CEO Ryan Cohen indicated that GameStop is eyeing a 'big' acquisition in the public retail sector, leveraging nearly $9 billion in cash reserves to pivot the business and enhance stock value, demonstrating a strong commitment to strategic transformation.
- Investor Confidence: Notable investor Michael Burry recently disclosed a long position in GameStop and suggested several potential acquisition targets, including ADT and Wayfair, which further boosted market optimism, as evidenced by rising sentiment on Stocktwits.
- Market Speculation: Stocktwits users actively discussed potential acquisition targets such as eBay, Corsair Gaming, and Peloton, indicating strong retail investor engagement and interest in GameStop's strategic direction.
See More
Silver Price Volatility Sparks Market Attention
- Increased Market Volatility: Silver prices have surged over 100% in just three months, prompting market observers to question whether it has become a 'meme asset,' indicating that retail investor behavior is significantly influencing price movements.
- Significant Fund Inflows: On January 26, individual investors poured approximately $171 million net into the iShares Silver Trust, nearly double the previous peak during the 2021 'silver squeeze,' highlighting a growing enthusiasm among retail investors for silver.
- Social Media Influence: The Reddit Silverbugs forum is active with users sharing purchase experiences and price targets, reflecting the impact of meme culture on the silver market, especially after sharp price fluctuations, leading to more unstable investor sentiment and behavior.
- Analysts Warn of Risks: Rhona O'Connell, head of market intelligence at StoneX, cautioned that silver prices have detached from sustainable levels, posing a risk of price crashes, and advised new investors to be cautious to avoid losses due to market sentiment volatility.
See More
Michael Burry Sees GameStop's Acquisition Potential
- Acquisition Strategy Insight: GameStop CEO Ryan Cohen's pursuit of an undervalued consumer company signals a strategic shift, with Burry noting that the company has the financial muscle, particularly with $6.1 billion in net cash, to pursue significant acquisitions.
- Potential Target Companies: Burry identifies ADT as the top acquisition target due to its cash flow and customer relationships, while Wayfair ranks second for its logistics infrastructure, indicating GameStop's intent to diversify its investment portfolio.
- 'Instant Berkshire' Strategy: Burry suggests Cohen may adopt an 'Instant Berkshire' approach, acquiring multiple companies to create a portfolio that generates excess capital for further investments, thereby enhancing GameStop's competitive position in the market.
- Positive Market Reaction: GameStop's stock rose 7% to $25.73, reflecting market optimism regarding its acquisition plans and reinforcing its image as a cash-rich holding company poised for new growth opportunities.
See More
Analysis of Store Openings and Closures in U.S. Retail Sector
- Increase in Store Openings: Coresight Research projects that U.S. retailers will open approximately 5,500 new stores in 2026, representing a 4.4% year-over-year increase, indicating that value retailers are effectively attracting consumer spending and reflecting sustained demand for low-cost goods.
- Decrease in Store Closures: It is expected that about 7,900 stores will close in 2026, a 4.5% decline from the previous year, marking the lowest number of closures in the past three years, which suggests signs of recovery in the retail sector post-pandemic.
- Impact of Bankruptcies: Last year, 32 retailers filed for bankruptcy, leading to significant store closures; however, affluent consumers continued to support retail growth, highlighting the ongoing K-shaped recovery in the economy.
- Tightening Real Estate Market: With a slowdown in bankruptcies, retail real estate demand is expected to tighten, particularly in major retail markets, as retailers compete for limited commercial space, potentially leading to rising rents in the coming years.
See More
US Retail Store Closures Decline as Industry Stabilizes
- Decline in Store Closures: It is projected that U.S. retailers will close approximately 7,900 stores in 2026, representing a 4.5% year-over-year decrease, marking the lowest closure rate in three years as the retail sector moves past a wave of bankruptcies.
- Increase in New Openings: According to Coresight Research, U.S. retailers are expected to open about 5,500 new stores in 2026, a 4.4% increase year-over-year, indicating the continued appeal of value-focused retailers in attracting consumer spending.
- Supply and Demand Dynamics: As demand for retail space rises and supply diminishes, developers may find renewed opportunities to construct new strip malls, potentially revitalizing the retail landscape and driving future growth.
- Economic Factors at Play: Coresight's global research head anticipates that while high inflation and a sluggish housing market continue to impact retail, these economic pressures are expected to ease over the coming year, leading to improved real estate plans for retailers.
See More
