> Is Ebay really THAT badly run that they can find such efficiencies?
Well, we should point out that Gamestop hasn't grown their own business - they've lost 50% of revenue since 2020. Why would anyone trust that management to "turn around" another business?
When the revenue goes to zero, how much of that pie will be profit? The industry they're in is dying quite quickly, and there are no other revenue centers. The high margin business they had was reselling physical game media.
This is the same story as other dead physical media, CD's, DVDs, etc. It's going to continue to decline, and GME has no pipeline of future revenue. They continue to close stores and shrink.
Also, “revenue isn’t important” (sic) is a wild statement to me and indicative of the state of US businesses these days. The stock is the product, that is it, and a shocking number of people have no issue with that while also saying the US needs to bring back manufacturing and build things again.
If investor (and now government with AI projects) money is being funneled into businesses that are ultimately just about their stocks and not producing anything, what will be the result of all that investment? What are we not investing in as a result?
Not growing revenue would be one thing, they're shedding revenue at pace - 50% decline since 2020.
> Shareholders seem to agree
First, it's a meme stock. The market can remain irrational for long periods. Another way to analyze it - almost all of the market cap of ~$10b is the $9b in cash. The shareholder pricing tells you they value the business at it's cash assets.
Gamestop's business of physically selling video games, consoles, etc is a dying/dead industry. Nothing can change the trajectory of the market that is almost completely disappeared.
It's a Blockbuster or Tower Records, a dead business running on fumes and memestock valuation.
A strong cash position business like that is effectively a finance sort of business, in other words, exactly the kind well positioned to go conduct an LBO.
> A strong cash position business like that is effectively a finance sort of business
You are conflating companies that make a lot of cash (and therefore can afford debt service) to a company that has limited cash flow, but has a large pile of cash.
The shareholders would be best served by a special dividend of the cash. Management has shown zero ability to grow a business.
In this case, the shareholders don't want a special dividend and prefer to own a company that has a strong cash position. There is nothing at all wrong with shareholders choosing that.
There are plenty of other stocks to invest in if one wants a highly-leveraged company that is trying to grow really fast.
Total revenue declined because they closed stores. But income went up because those stores were losing money.
They also made a lot off of interest on their cash, but that is going to get cut by about 30% if this goes through, as the combined cash position Gamestop has access to declines from 9 billion to 6 billion. Or so I've heard.
I am? Last reported quarter was their 10Y high. The Q4 before that is in the top 5. And it's been positive for almost 2 years, whereas before, it had been negative for several.
>No matter how you look at it this company is a dog.
Apparently we have different definitions of flying. They sold a bunch of stock, bought treasuries and shut down some money sink stores. Amazing stuff. Apparently if I just buy treasuries and stop wasting money on garbage my stock should sore too.
> GameStop already has this network of pawn shops, and those stores are doing enough business to justify their existence
Gamestop closed 2,400 stores from 2020 to present, and operates just 2,200 stores currently. They'll continue to close stores as their revenue continues to shrink (down 60% in the last decade).
>used gaming inventory
physical used game inventory is a fraction of what it was a decade ago, and continues to shrink as a category, digital sales continue to climb and exclude Gamestop
It's reasonable to predict that as physical media is phased out by the likes of Sony, Microsoft, and Nintendo, that the value of offline capable inventory will shift to an investment instead of a liability. Increasing their percent cut as a result.
Their margin was highest on used physical media, which continues to plummet. Physical sales are down from $13b in 2015 to $1.5b in 2025, while total sales of physical + digital went from $23.5b in 2015 to $60b in 2025. Physical media is a tiny fraction of current game sales, even if their margin skyrockets, they're stuck in a tiny kid pool of potential sales.
Not to be harsh on people who like this stuff, but reminds me of whenever people bring up how big vinyl record sales are now. Which is like, yea they're "big" just because it was a tiny market for the last decade and they're profiting mostly on nostalgia. Vinyl's not making some huge comeback, but it will probably sustain some niche resellers for a long time.
The people have voted with their feet, despite anecdata
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