taylor: from bloomberg world headquarters in new york, i am taylor riggs. housetops fair today -- let's see how stocks favored today. let's take a look at what happened in the last hour. closing in on some record highs on the s&p, 4704 the number for a record high. 4701 puts us exactly where we were two weeks ago.

volatility on thanksgiving, it is like it never happen. other indices not faring too bad as well. the russell 2000 the big outperformer. if we change up the board, i hate to say it, but it is all about apple. we are at about 175, which would have put apple to a $3 trillion market cap. right now, it is about $2.72 trillion, but who is counting? romaine: meme stocks. remember them? gamestop reporting earnings after the bell. this was all the talk here. a lot of people talking about the pressure by retail investors to squeeze out some short-sellers. one analyst estimated in the most recent quarter. and we will focus on gamestop but also some mean mania. it has not gone away but may be the media is not as focused on it as it was.

they were trailing companies favored by mutual funds by a record amount. the question is, will the mentality behind amc and gamestop thrown aside? will caution take over. let's start with how gamestop is doing. sonali: this is a stock that rose 830% on the year, and now it is taking a dive after hours, down more than 5% on the -- in the last hour's trading, missing analyst estimates on profitability, or the lack thereof. there net loss had widened. people getting burned today. romaine: a lot of moving parts right now with gamestop your let's bring in someone who has been following this company from a fundamentals perspective, and investor in it since 2017, rod alzmann, founder of gmebe.com.

what are you looking for out of the company overall with regard to their strategy, with regards to their earnings or the lack thereof? rod: sure, romaine. thank you for having me back on. they lost money but i think we should look at what the company has told us is important. they told us they think net sales is the most important metric if we want to think about their transformation into a more tech oriented company, and they did beat on net sales by 9%, so nice to see that versus analyst consensus. they have continued to broaden their skew count. they have added about 7500 skews from what we have been tracking, so nice to see them broadening that, selling more tv's, and the pr they cited, samsung, lg, some of the tv sellers, so we see them broaden their skews and grow the top line, but it is not flowing through the bottom line yet. taylor: you mentioned customers

like samsung, lg and others, and i know that's the second bullet point in the press release. there are only six bullet points. i am curious when investors might just get a strategy that feels a little more fleshed out? is that what you want to see or are you ok with we were getting on these conference calls? rod: look, that is a great question. that is a valid concern that some people in old wall street have continued to raise. this new management team, and let's remember, the entire board of directors has been refreshed, almost the entire c-suite. over 100 hires from vp down, including people involved with the blockchain, so they have brought on new people in service of the strategy, have been very coy. we have tried to read the

breadcrumbs as best we can as an interested group of retail investors. when it comes to blockchain, earlier this year, they launched nft.gamestop.com, giving us a little bit about how -- about what this would be, power to the gamers, collectors, so some sort of nft oriented platform. the former head of business, now the former -- now the head of that at gamestop, so pretty hazy. taylor: it is not just old wall street. new wall street wants them to also be changing into that digital strategy faster. do you have faith they could do that in a faster tim frame -- timeframe? rod: we all want it to happen. with the company, as you alluded to, they were able to raise

significant capital earlier this year. the balance sheets looked night and day from a year ago terms of one point billion dollars in cash on the books, no net debt, and they have continued to reduce their operating lease liability, so from a -- does this need to happen overnight? it does not. they have leeway, a balance sheet, liquidity. i think people on wall street and three till investors in general, memers, one these things to happen overnight, and i don't think you can re-create a company that has been in the analog era for its existence into a pure digital player or digital first player overnight, but with the amount of hires, i see people leading -- leaving apple, amazon, two weeks ago to gamestop. whatever the -- whatever they are hearing must be compelling. taylor: we joke about old wall

street. thank you for your time. since we really want to stick with this focus on meme stocks, romaine, you are taking a look at hertz. it was cut up and -- it was caught up in the trade or maybe not. we saw this headline -- elizabeth warren blasting hertz for a buyback. romaine: there was some legitimacy to them. one of the reasons we like rod is when people were saying this is just a meme stock, traders playing around, there was a fundamental case to be made for gamestop, for hertz, even you could say for amc and other companies, but of course, once that movement of the trade itself overtakes that narrative, that is all that gets focused on, the mean. i know we are talking about hertz talking about hertz.

i don't know what we are looking at. we talk about the bonds. this is your wheelhouse. what does that tell you? sonali: certainly money has been made when they were facing bankruptcy just a while ago, but i have to also say, while the bondholders have made out like bandits, the stockholders are in the red since the listing on the nasdaq. so interesting, old wall street wins again when it comes to herds. -- talk hertz. -- to hertz. taylor: let's get more on this story with someone following this closely. good to have you, particularly following that. from a bond-credit analysis. what is that telling you? is that believable. >> sure. i think the hertz situation is an interesting one to watch. management is in the process of

trying to shed its bankrupt self. it has the momentum of the meme stocks to back it up and keep interest going, but more than that, we see the company is keeping its capital structure good. it has raised money this past month. and the shareholders that brought it out of bankruptcy -- we see that management is trying to satisfy shareholders and bondholders. if you take the $2 billion a buyback announcement dated, they tempered at with saying also, listen, we want to keep leverage at 1.5 times or below, so they are trying to balance both. sonali: i guess i am not convinced when it comes to hertz . why is capital for stock buybacks the appropriate use of capital at this point in time when they need to show a growth story to investors? >> sure, sonali.

i think you kind of get at that main question that we ask corporate work and analysts struggle with constantly -- we ask corporate analysts or credit analysts struggle with constantly. you want to buy at a high instead of a low, the opposite of what we are taught, buy low, sell high, so a funny situation. that said, what hertz is doing is taking a page out of avis's book. they did share buybacks this year. so hertz and avis are kind of keeping in touch with one another, but hertz is definitely getting more of a reaction from, you know, senators and whoever else because of that meme element to it, because avis did not go through bankruptcy. it did not have that meme the following that drums of all interest in it and all sorts of

headlines to keep the momentum going. romaine: at the end of the day, we are talking about a relatively old business -- old-school business. gamestop sells videogames, rental cars, movie theater chain. we are trying to make this sexy and like it is something new, but the fundamentals at some point have to catch up with this. the ideas that you will only rent so many cars a year. other than pricing power, which i don't necessarily know hertz has, where do you see the growth coming from? >> sure. we are already seeing that 2022 will additionally likely be a good tail and but beyond that what are these companies going to do? a lot of them are looking between hertz and avis. enterprise is a different discussion, but hertz and avis are looking at self-driving cars, being first movers so that

their drivers have appropriately fleeted cars, not necessarily their own vehicles, so they are thinking outside the box beyond your standard business trick, renting a car at the airport, driving around and returning it to a different airport. so they are trying to reinvent themselves. i said, it is definitely an instrument -- that said, it is definitely an industry where i don't know that i would have pegged as memedom. i think it is kind of funny that you say that all these companies that are sort of legacy industries are down is sort of industry -- is sort of interesting and that is the question. if tesla and all these electric vehicle options come back together, or is it something we have not thought about yet? romaine: a lot of questions still to be answered but a lot of investors still buying into

it. jody of bloomberg intelligence, who covers this for us, doing great research on hertz and other companies under her umbrella. coming up, talking about amc. movies will never go out of style. it is a question of where you watch them. in the theater or at home, or you tesla going down the highway? taylor: you are probably playing video games instead of watching. do you go to the theater for that experience or do you prefer the convenience? that is the underlying question. romaine: we will get some commentary from alicia reese from wedbush securities. that's coming up after the break. this is bloomberg. ♪

romaine: about a year ago at this time, we got chatter about gamestop. the media could not get enough. that has faded from our consciousness but we are talking about it today. amc has fallen through the back half of the year but has been supported by retail investors. the movie business still under pressure. the ceo of one cinema chain stopped by to give his thoughts on the business. >> june, we had a very impressive october, which generated for the whole group something like 90% revenue of the same month in 2019. november was also good. we have not got the final numbers yet.

we are looking at very promising -- at a very promising december. taylor: for more on what the shift in this industry means for amc, one of the classic meme stocks, alicia reese, analyst at wedbush securities. we have been talking about maybe getting down to good old fundamentals and we are thrilled we can do that with you, a traditional securities analyst. what do you make of amc, the fundamentals of the stock, now at $32 a share? alicia: i certainly don't work -- don't think it is worth $32 if you look at fundamentals and measure it against its competitors in the industry. that does not mean it will drop to that fundamental level with over 80% retail shareholders owning the stock. romaine: what is the long-term outlook for the theater business as a whole, including amc, because even before the

pandemic, we had seen a significant slowdown in the number of people attending these heaters? -- these theaters? ticket prices had gone out but the trend is still down and we are used to watching blockbusters on our couch at home. is there a long-term future for a broad theater based business? alicia: prior to 2019 attendance have fallen and they made up for it in higher prices, so i do grow. in 2019, though, you had the competition over the movie club or the different subscription services trying to get into movie theaters for cheaper, so there's a good way that the movie theaters addressed that and created their own subscription programs and made it possible for people to go and prove attendance even higher at a lower price point, so they did

not necessarily grow the average ticket price meaningfully, but to grow attendance. sonali: i am so interested. amc is one of the companies that's been taking questions from the retail crowd when it comes to its investments and whatnot. the opposite of gamestop, not a lot of detail. how have they done in terms of keeping this meme or retail trading crowd engaged? alicia: they have done good. they recognize the majority of their shareholders are retail investors, so opening them up to their investor connect, where the answers throughout -- where they answer questions throughout the day, and having that direct line to the shareholders via twitter, really, that official is engaging and has kept them happy, most recently by launching a couple nft's for shareholders. taylor: good old and fte's.

-- old nft's. alicia: that is what they are asking for. taylor: it all comes back to nft's thank you, alicia reese of wedbush securities. let's round out the show with where we stand in look at it with you. was it the retail trader's moment that has passed or do you think it is coming back with a vengeance? >> there remains to be seen. the people i talked to who are retail traders who buy into the hold on for dear life motto still are harping on the idea of potential short squeezes, whether it is amc or gamestop, but as you were talking with alicia, the trade should fundamentally been over and has been trending that direction,

but it is kind of a cycle of you the retail traders getting flushed with cash and piling back into gamestop or people dipping their toes in. romaine: to we get a sense of how much of this was truly organic, truly by the retail trader and how much was may cherry picking on the part of some institutions who saw some low hanging fruit? you saw the ping-pong we saw between meme stocks. when one went down, but they moved onto another. we saw headphone makers go up, build a bear, crazy things where you think, why is this thing up one hundred percent today? >> it needed a spark. gamestop was the spark that lit the fire of meme stocks, and we saw mainstream money moving into it, but also hedge funds realizing that, at one point, you could generate huge returns whether you are trading calls or the underlying stock itself, but

there are a lot of questions out there. is wall street writing the playbook and typing things on reddit? it is root -- is it retail investors coming up with this? it depends on the individual stock that you are talking about, and looking at every given day, because there is -- what is driving it. romaine: you are not going to build your career around meme stocks are you, billy? >> i certainly hope not. taylor: you have had a great career on this program, chief meme stock correspondent, bailey. thank you as always, breaking it down as always for us the picture. we will break it down for you big picture in our final thoughts next. this is bloomberg. ♪

romaine: an interesting look at the meme stocks. i year ago, all the talk, gamestop, amc, costs -- koss, companies we have never heard of rising 100% on the day. taylor: i can't believe we wasted a decade of schooling studying fundamentals. romaine: you have a charter holder? taylor: it is a charter holder. sonali: all the rage. who has the last laugh? amc up more than 1000 percent. romaine: we joke about these companies. some, there was a fundamentals story to be had. you could at least make one. gamestop to a certain extent, probably amc, but also the issue we talked about with alicia

reese, these companies are talking directly with retail traders. taylor: they have a new boxing class and we are within punching range, because we are standing, peloton. romaine: hello todd is not a meme stock. -- peloton is not a meme stock. taylor: this is bloomberg. ♪

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