Stock Analysis on Net

GameStop Corp. (NYSE:GME)

This company has been moved to the archive! The financial data has not been updated since June 1, 2022.

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like GameStop Corp. common stock.


Rates of Return

GameStop Corp., monthly rates of return

Microsoft Excel
GameStop Corp. (GME) Standard & Poor’s 500 (S&P 500)
t Date PriceGME,t1 DividendGME,t1 RGME,t2 PriceS&P 500,t RS&P 500,t3
Feb 29, 2016 $7.71 1,932.23
1. Mar 31, 2016 $7.93 $0.0925 4.05% 2,059.74 6.60%
2. Apr 30, 2016 $8.20 3.40% 2,065.30 0.27%
3. May 31, 2016 $7.28 -11.22% 2,096.95 1.53%
. . . . . . .
. . . . . . .
. . . . . . .
70. Dec 31, 2021 $37.10 -24.36% 4,766.18 4.36%
71. Jan 31, 2022 $27.23 -26.60% 4,515.55 -5.26%
Average (R): 23.78% 1.29%
Standard deviation: 194.23% 4.25%
GameStop Corp. (GME) Standard & Poor’s 500 (S&P 500)
t Date PriceGME,t1 DividendGME,t1 RGME,t2 PriceS&P 500,t RS&P 500,t3
Feb 29, 2016 $7.71 1,932.23
1. Mar 31, 2016 $7.93 $0.0925 4.05% 2,059.74 6.60%
2. Apr 30, 2016 $8.20 3.40% 2,065.30 0.27%
3. May 31, 2016 $7.28 -11.22% 2,096.95 1.53%
4. Jun 30, 2016 $6.65 $0.0925 -7.38% 2,098.86 0.09%
5. Jul 31, 2016 $7.74 16.39% 2,173.60 3.56%
6. Aug 31, 2016 $7.10 -8.27% 2,170.95 -0.12%
7. Sep 30, 2016 $6.90 $0.0925 -1.51% 2,168.27 -0.12%
8. Oct 31, 2016 $6.01 -12.90% 2,126.15 -1.94%
9. Nov 30, 2016 $6.17 $0.0925 4.20% 2,198.81 3.42%
10. Dec 31, 2016 $6.32 2.43% 2,238.83 1.82%
11. Jan 31, 2017 $6.12 -3.16% 2,278.87 1.79%
12. Feb 28, 2017 $6.11 -0.16% 2,363.64 3.72%
13. Mar 31, 2017 $5.64 $0.095 -6.14% 2,362.72 -0.04%
14. Apr 30, 2017 $5.67 0.53% 2,384.20 0.91%
15. May 31, 2017 $5.54 -2.29% 2,411.80 1.16%
16. Jun 30, 2017 $5.40 $0.095 -0.81% 2,423.41 0.48%
17. Jul 31, 2017 $5.42 0.37% 2,470.30 1.93%
18. Aug 31, 2017 $4.63 -14.58% 2,471.65 0.05%
19. Sep 30, 2017 $5.17 $0.095 13.71% 2,519.36 1.93%
20. Oct 31, 2017 $4.67 -9.67% 2,575.26 2.22%
21. Nov 30, 2017 $4.69 $0.095 2.46% 2,647.58 2.81%
22. Dec 31, 2017 $4.49 -4.26% 2,673.61 0.98%
23. Jan 31, 2018 $4.20 -6.46% 2,823.81 5.62%
24. Feb 28, 2018 $3.92 -6.67% 2,713.83 -3.89%
25. Mar 31, 2018 $3.16 $0.095 -16.96% 2,640.87 -2.69%
26. Apr 30, 2018 $3.41 7.91% 2,648.05 0.27%
27. May 31, 2018 $3.30 -3.23% 2,705.27 2.16%
28. Jun 30, 2018 $3.64 $0.095 13.18% 2,718.37 0.48%
29. Jul 31, 2018 $3.60 -1.10% 2,816.29 3.60%
30. Aug 31, 2018 $3.32 -7.78% 2,901.52 3.03%
31. Sep 30, 2018 $3.82 $0.095 17.92% 2,913.98 0.43%
32. Oct 31, 2018 $3.65 -4.45% 2,711.74 -6.94%
33. Nov 30, 2018 $3.42 -6.30% 2,760.17 1.79%
34. Dec 31, 2018 $3.16 $0.095 -4.82% 2,506.85 -9.18%
35. Jan 31, 2019 $2.84 -10.13% 2,704.10 7.87%
36. Feb 28, 2019 $2.93 3.17% 2,784.49 2.97%
37. Mar 31, 2019 $2.54 $0.095 -10.07% 2,834.40 1.79%
38. Apr 30, 2019 $2.16 -14.96% 2,945.83 3.93%
39. May 31, 2019 $1.90 -12.04% 2,752.06 -6.58%
40. Jun 30, 2019 $1.37 -27.89% 2,941.76 6.89%
41. Jul 31, 2019 $1.01 -26.28% 2,980.38 1.31%
42. Aug 31, 2019 $0.99 -1.98% 2,926.46 -1.81%
43. Sep 30, 2019 $1.38 39.39% 2,976.74 1.72%
44. Oct 31, 2019 $1.36 -1.45% 3,037.56 2.04%
45. Nov 30, 2019 $1.59 16.91% 3,140.98 3.40%
46. Dec 31, 2019 $1.52 -4.40% 3,230.78 2.86%
47. Jan 31, 2020 $0.96 -36.84% 3,225.52 -0.16%
48. Feb 29, 2020 $0.90 -6.25% 2,954.22 -8.41%
49. Mar 31, 2020 $0.88 -2.22% 2,584.59 -12.51%
50. Apr 30, 2020 $1.43 62.50% 2,912.43 12.68%
51. May 31, 2020 $1.02 -28.67% 3,044.31 4.53%
52. Jun 30, 2020 $1.09 6.86% 3,100.29 1.84%
53. Jul 31, 2020 $1.00 -8.26% 3,271.12 5.51%
54. Aug 31, 2020 $1.67 67.00% 3,500.31 7.01%
55. Sep 30, 2020 $2.55 52.69% 3,363.00 -3.92%
56. Oct 31, 2020 $2.62 2.75% 3,269.96 -2.77%
57. Nov 30, 2020 $4.14 58.02% 3,621.63 10.75%
58. Dec 31, 2020 $4.71 13.77% 3,756.07 3.71%
59. Jan 31, 2021 $81.25 1,625.05% 3,714.24 -1.11%
60. Feb 28, 2021 $25.44 -68.69% 3,811.15 2.61%
61. Mar 31, 2021 $47.46 86.56% 3,972.89 4.24%
62. Apr 30, 2021 $43.40 -8.55% 4,181.17 5.24%
63. May 31, 2021 $55.50 27.88% 4,204.11 0.55%
64. Jun 30, 2021 $53.54 -3.53% 4,297.50 2.22%
65. Jul 31, 2021 $40.28 -24.77% 4,395.26 2.27%
66. Aug 31, 2021 $54.56 35.45% 4,522.68 2.90%
67. Sep 30, 2021 $43.87 -19.59% 4,307.54 -4.76%
68. Oct 31, 2021 $45.88 4.58% 4,605.38 6.91%
69. Nov 30, 2021 $49.05 6.91% 4,567.00 -0.83%
70. Dec 31, 2021 $37.10 -24.36% 4,766.18 4.36%
71. Jan 31, 2022 $27.23 -26.60% 4,515.55 -5.26%
Average (R): 23.78% 1.29%
Standard deviation: 194.23% 4.25%

Show all

1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of GME during period t

3 Rate of return on S&P 500 (the market portfolio proxy) during period t


Variance and Covariance

GameStop Corp., calculation of variance and covariance of returns

Microsoft Excel
t Date RGME,t RS&P 500,t (RGME,tRGME)2 (RS&P 500,tRS&P 500)2 (RGME,tRGME)×(RS&P 500,tRS&P 500)
1. Mar 31, 2016 4.05% 6.60% 389.16 28.16 -104.69
2. Apr 30, 2016 3.40% 0.27% 415.16 1.05 20.83
3. May 31, 2016 -11.22% 1.53% 1,224.98 0.06 -8.41
. . . . . . .
. . . . . . .
. . . . . . .
70. Dec 31, 2021 -24.36% 4.36% 2,317.76 9.42 -147.75
71. Jan 31, 2022 -26.60% -5.26% 2,538.54 42.91 330.05
Total (Σ): 2,640,729.02 1,262.70 -1,983.24
t Date RGME,t RS&P 500,t (RGME,tRGME)2 (RS&P 500,tRS&P 500)2 (RGME,tRGME)×(RS&P 500,tRS&P 500)
1. Mar 31, 2016 4.05% 6.60% 389.16 28.16 -104.69
2. Apr 30, 2016 3.40% 0.27% 415.16 1.05 20.83
3. May 31, 2016 -11.22% 1.53% 1,224.98 0.06 -8.41
4. Jun 30, 2016 -7.38% 0.09% 971.16 1.44 37.43
5. Jul 31, 2016 16.39% 3.56% 54.60 5.15 -16.76
6. Aug 31, 2016 -8.27% -0.12% 1,027.13 2.00 45.32
7. Sep 30, 2016 -1.51% -0.12% 639.80 2.00 35.81
8. Oct 31, 2016 -12.90% -1.94% 1,345.33 10.46 118.65
9. Nov 30, 2016 4.20% 3.42% 383.33 4.52 -41.61
10. Dec 31, 2016 2.43% 1.82% 455.78 0.28 -11.27
11. Jan 31, 2017 -3.16% 1.79% 726.02 0.25 -13.37
12. Feb 28, 2017 -0.16% 3.72% 573.30 5.89 -58.13
13. Mar 31, 2017 -6.14% -0.04% 895.07 1.77 39.83
14. Apr 30, 2017 0.53% 0.91% 540.48 0.15 8.91
15. May 31, 2017 -2.29% 1.16% 679.80 0.02 3.51
16. Jun 30, 2017 -0.81% 0.48% 604.79 0.66 19.94
17. Jul 31, 2017 0.37% 1.93% 548.02 0.41 -15.04
18. Aug 31, 2017 -14.58% 0.05% 1,471.17 1.53 47.47
19. Sep 30, 2017 13.71% 1.93% 101.31 0.41 -6.42
20. Oct 31, 2017 -9.67% 2.22% 1,118.99 0.86 -31.00
21. Nov 30, 2017 2.46% 2.81% 454.44 2.30 -32.32
22. Dec 31, 2017 -4.26% 0.98% 786.50 0.10 8.67
23. Jan 31, 2018 -6.46% 5.62% 914.40 18.71 -130.80
24. Feb 28, 2018 -6.67% -3.89% 927.01 26.90 157.93
25. Mar 31, 2018 -16.96% -2.69% 1,660.11 15.85 162.19
26. Apr 30, 2018 7.91% 0.27% 251.82 1.04 16.19
27. May 31, 2018 -3.23% 2.16% 729.32 0.75 -23.46
28. Jun 30, 2018 13.18% 0.48% 112.33 0.65 8.56
29. Jul 31, 2018 -1.10% 3.60% 618.97 5.34 -57.47
30. Aug 31, 2018 -7.78% 3.03% 995.91 3.01 -54.72
31. Sep 30, 2018 17.92% 0.43% 34.32 0.74 5.05
32. Oct 31, 2018 -4.45% -6.94% 796.96 67.78 232.41
33. Nov 30, 2018 -6.30% 1.79% 904.90 0.24 -14.85
34. Dec 31, 2018 -4.82% -9.18% 818.23 109.62 299.49
35. Jan 31, 2019 -10.13% 7.87% 1,149.67 43.25 -222.98
36. Feb 28, 2019 3.17% 2.97% 424.82 2.82 -34.64
37. Mar 31, 2019 -10.07% 1.79% 1,145.72 0.25 -16.93
38. Apr 30, 2019 -14.96% 3.93% 1,500.85 6.96 -102.24
39. May 31, 2019 -12.04% -6.58% 1,282.87 61.94 281.88
40. Jun 30, 2019 -27.89% 6.89% 2,670.30 31.37 -289.42
41. Jul 31, 2019 -26.28% 1.31% 2,505.76 0.00 -1.03
42. Aug 31, 2019 -1.98% -1.81% 663.60 9.62 79.89
43. Sep 30, 2019 39.39% 1.72% 243.79 0.18 6.65
44. Oct 31, 2019 -1.45% 2.04% 636.53 0.56 -18.95
45. Nov 30, 2019 16.91% 3.40% 47.18 4.46 -14.51
46. Dec 31, 2019 -4.40% 2.86% 794.27 2.45 -44.15
47. Jan 31, 2020 -36.84% -0.16% 3,675.06 2.12 88.21
48. Feb 29, 2020 -6.25% -8.41% 901.81 94.15 291.39
49. Mar 31, 2020 -2.22% -12.51% 676.13 190.56 358.94
50. Apr 30, 2020 62.50% 12.68% 1,499.22 129.78 441.10
51. May 31, 2020 -28.67% 4.53% 2,751.16 10.47 -169.73
52. Jun 30, 2020 6.86% 1.84% 286.20 0.30 -9.25
53. Jul 31, 2020 -8.26% 5.51% 1,026.37 17.79 -135.13
54. Aug 31, 2020 67.00% 7.01% 1,867.95 32.65 246.97
55. Sep 30, 2020 52.69% -3.92% 836.04 27.20 -150.79
56. Oct 31, 2020 2.75% -2.77% 442.48 16.47 85.38
57. Nov 30, 2020 58.02% 10.75% 1,172.04 89.54 323.94
58. Dec 31, 2020 13.77% 3.71% 100.24 5.86 -24.23
59. Jan 31, 2021 1,625.05% -1.11% 2,564,074.83 5.79 -3,852.52
60. Feb 28, 2021 -68.69% 2.61% 8,550.60 1.73 -121.77
61. Mar 31, 2021 86.56% 4.24% 3,940.88 8.71 185.29
62. Apr 30, 2021 -8.55% 5.24% 1,045.54 15.60 -127.73
63. May 31, 2021 27.88% 0.55% 16.81 0.55 -3.05
64. Jun 30, 2021 -3.53% 2.22% 745.93 0.86 -25.38
65. Jul 31, 2021 -24.77% 2.27% 2,356.79 0.97 -47.70
66. Aug 31, 2021 35.45% 2.90% 136.23 2.58 18.75
67. Sep 30, 2021 -19.59% -4.76% 1,881.24 36.59 262.37
68. Oct 31, 2021 4.58% 6.91% 368.58 31.61 -107.94
69. Nov 30, 2021 6.91% -0.83% 284.63 4.52 35.86
70. Dec 31, 2021 -24.36% 4.36% 2,317.76 9.42 -147.75
71. Jan 31, 2022 -26.60% -5.26% 2,538.54 42.91 330.05
Total (Σ): 2,640,729.02 1,262.70 -1,983.24

Show all

VarianceGME = Σ(RGME,tRGME)2 ÷ (71 – 1)
= 2,640,729.02 ÷ (71 – 1)
= 37,724.70

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (71 – 1)
= 1,262.70 ÷ (71 – 1)
= 18.04

CovarianceGME, S&P 500 = Σ(RGME,tRGME)×(RS&P 500,tRS&P 500) ÷ (71 – 1)
= -1,983.24 ÷ (71 – 1)
= -28.33


Systematic Risk (β) Estimation

Microsoft Excel
VarianceGME 37,724.70
VarianceS&P 500 18.04
CovarianceGME, S&P 500 -28.33
Correlation coefficientGME, S&P 5001 -0.03
βGME2 -1.57
αGME3 25.81%

Calculations

1 Correlation coefficientGME, S&P 500
= CovarianceGME, S&P 500 ÷ (Standard deviationGME × Standard deviationS&P 500)
= -28.33 ÷ (194.23% × 4.25%)
= -0.03

2 βGME
= CovarianceGME, S&P 500 ÷ VarianceS&P 500
= -28.33 ÷ 18.04
= -1.57

3 αGME
= AverageGME – βGME × AverageS&P 500
= 23.78%-1.57 × 1.29%
= 25.81%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.42%
Expected rate of return on market portfolio2 E(RM) 13.61%
Systematic risk (β) of GameStop Corp. common stock βGME -1.57
 
Expected rate of return on GameStop Corp. common stock3 E(RGME) -10.01%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 E(RGME) = RF + βGME [E(RM) – RF]
= 4.42% + -1.57 [13.61%4.42%]
= -10.01%