How GameStop Can Survive (2024)

FAQs

Why is GameStop struggling? ›

GameStop, known for its consumer electronics and gaming merchandise, has struggled with profitability as the games industry has moved away from physical discs to online downloads.

“GameStop is a much healthier business today than it was in the start of 2021,” CEO Matt Furlong, who made nearly $17 million (roughy ¹⁄₃ of Q4's 2022 profit) in 2021. The shocking profit report caused GameStop stocks to jump 35% on Wednesday.

GameStop relies heavily on trade-ins. About 46% profit on each preowned game they sell. With less physical games being bought, there are less trades being made. This method of business seems doomed to fail in the rising digital age.

They were the place where millions of young people could trade in used games, debate the merits of different franchises and get advice from GameStop's staff, often avid gamers themselves. In the 2000s, this winning formula propelled the company to open thousands of stores around the world and make money hand over fist.

Based on the volatility of GME shares in 2022, we can say that GameStop's retail investors endured an extremely difficult year much better than many expected. So expect GME to flourish again in 2023, especially in the event of growth in the broader market.

GameStop Corp. has crashed in 2022 after a peak in 2021. GameStop struggled to bounce in November, but overall behavior remains bearish. GameStop stock is expected to decline further based on the recent development and price action.

GameStop's prospects aren't great as any remaining investors are still reckoning with. It sports a middling 21 IBD Composite Rating. That means its chart and fundamentals only underperform 79% of all companies' And the company is seen losing money in fiscal 2024, ended in January 2024.

Conversation. Breaking News: Gamestop $GME had more income than Amazon $AMZN in the previous quarter. GameStop's net income in Q4 2022 was $48.2 million (on $2.3B in revenue) vs Amazon's $278 million net income (on $149.2B in revenue) businesswire.com/news/home/2023… ir.aboutamazon.com/news-release/n…

The problems began in 2013.

The implications of that were huge for the world's biggest game retailer. The foundation of GameStop's business is selling video games on discs. And with the digitization of console games, the company was facing an existential threat along the lines of iTunes' impact on record stores.

Who stopped GameStop trading? ›

Investors were only allowed to sell or hold shares. A little-known intermediary in the process of buying and selling equities forced Robinhood and other brokers to restrict trading in several securities on Thursday, including GameStop , AMC Entertainment , BlackBerry , and Nokia .

Robinhood's decision to halt buying activity on GameStop stock on January 28 was a result of 'extraordinary' trading and subsequent complications posed by clearing rules, the company's CEO Vlad Tenev told the House Financial Services Committee during testimony yesterday.

Mutual-fund giant Fidelity Investments, which had been GameStop's largest shareholder with a nearly 13% stake, sold nearly every share it owned in January 2021, according to public filings.

But the main reason behind the interest in the company is because it was the most heavily shorted stock on Wall Street. About 71.66 million GameStop shares have been shorted, worth about $4.66 billion. This is where the very popular 'wallstreetbets' came into the picture.

Stock Price Forecast

The 2 analysts offering 12-month price forecasts for GameStop Corp have a median target of 13.25, with a high estimate of 20.00 and a low estimate of 6.50. The median estimate represents a -43.01% decrease from the last price of 23.25.

For the month of February, Melvin posted a 22-percent gain, but it would need much more to break even from their earlier losses; they were reported to have suffered further losses during the GME's continued resurgence in May 2021. Melvin ultimately shut down on May 18, 2022.

' The average price projection for GME stock for the next 12 months is $10.10; this represents a 45% downside from its current price at publication. It's interesting to note that the maximum price forecast for the next year is $20, representing a gain of 8.87%.

We will hold your requested item until the end of the current business day, depending if your order was placed during store hours. The e-mail is usually sent within 2 hours if your order is placed during store hours. *Orders placed after store closing will receive an e-mail the following business day.

What Is GameStop's Debt Position? Video game retailer GameStop (GME) - Get Free Report currently has very low debt compared to its assets. GameStop's total debt is about $575 million, of which $378 million is long-term debt.

How is GameStop doing financially? ›

For the full fiscal year, GameStop saw $5.93 billion in sales, down slightly from $6.01 billion in fiscal 2021, and saw increased revenues from its collectibles category, which the retailer is banking will promote long-term growth.

Thanks to GameStop's management's cost-cutting efforts and GME's loyal shareholders, it's likely the stock will perform better in 2023.

According to the Traders Union long-term price forecast GameStop (GME) can reach $74.78 by 2025, $382.05 by 2030, $657.14 by 2034.

InvestorsObserver is giving GameStop Corp (GME) an Analyst Rating Rank of 1, meaning GME is ranked higher by analysts than 1% of stocks. The average price target for GME is $13.25 and analyst's rate the stock as a Sell. Wall Street analysts are rating GME a Sell today.

Largest shareholders include Vanguard Group Inc, BlackRock Inc., VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, IJH - iShares Core S&P Mid-Cap ETF, State Street Corp, NAESX - Vanguard Small-Cap Index Fund Investor Shares, Susquehanna International Group, Llp, VISVX - Vanguard Small-Cap Value Index Fund ...

Best Buy is the leading consumer electronics chain in North America. The company started as a music retailer and expanded its offerings to include electronic products, video game systems and software, and gaming accessories.

Median chief executive officer total direct compensation (the sum of salary, short-term incentives and long-term incentives) is $425,000 for the entire survey population of family businesses. For companies with revenue below $10 million, median CEO total direct compensation is $200,000.

Who owns Gamestop? Gamestop (NYSE: GME) is owned by 28.01% institutional shareholders, 10.63% Gamestop insiders, and 61.36% retail investors. Ryan Cohen is the largest individual Gamestop shareholder, owning 9.10M shares representing 2.99% of the company. Ryan Cohen's Gamestop shares are currently valued at $219.33M.

GameStop Corp., a Fortune 500 and S&P 500 company, is a global, multichannel video game, consumer electronics and collectibles retailer. GameStop operates more than 5,700 stores across 14 countries. GameStop is a family of specialty retailers that makes your favorite technologies affordable and simple.

In 2022, Amazon closed its divide in terms of total revenue, as it generated over $513 billion in revenue, compared to over $572 billion in revenue from Walmart.

How much was GameStop at its lowest? ›

The all-time high GameStop stock closing price was 86.88 on January 27, 2021. The GameStop 52-week high stock price is 47.99, which is 83.8% above the current share price. The GameStop 52-week low stock price is 15.41, which is 41% below the current share price.

GameStop is the world's largest video game retailer. With over 4,400 stores located throughout the United States and 15 countries, we are the retail destination for gamers around the world.

GameStop led a pack of highly shorted stocks that surged in January 2021 after retail investors swapping theories on Reddit, Twitter, and TikTok piled in and went viral on social media.

Robinhood played a critical role when a group of Reddit posters saw an opportunity to make money while also giving a jab to Wall Street and hedge funds. However, Robinhood made the surprising move to restrict buying GameStop citing issues with volatile stock and regulatory requirements.

A federal judge ruled Thursday that Robinhood must defend itself in court against a class action lawsuit related to the online brokerage's January 2021 decision to halt trading in exploding “meme stocks” like AMC and GameStop, several outlets reported Thursday, though Robinhood vows to “vigorously defend” itself in the ...

On Jan. 28, Robinhood suspended the ability to buy shares of GameStop. App users were allowed only to sell their positions, not open new ones or add to their existing holdings in GME. The brokerage's statement explaining its actions read, "We continuously monitor the markets and make changes where necessary.

June 7 (Reuters) - Ryan Cohen, the billionaire investor whose bold bet on GameStop Corp (GME.N) made him a hero to meme stock traders, took over as executive chairman on Wednesday after the video game retailer ousted its CEO and posted a bigger-than expected quarterly loss.

His risky bet made him a millionaire on paper. It could've gone very differently. AJ Vanover put about $4,500 into a risky bet on GameStop and followed the saga on the subreddit Wallstreetbets. Now, this Missouri dad who earns $35,000 a year is a millionaire on paper.

The insurer MassMutual will pay a $4 million fine as part of a settlement with Massachusetts regulators involving the conduct of Keith Gill, a former employee and online trader known as “Roaring Kitty” whose relentless cheerleading for shares of GameStop was at the heart of the meme-stock mania earlier this year.

The GameStop stock price run-up essentially resulted from a pump-and-dump scheme. In such a scenario, an investor or investors buy heavily into a low-value stock, something that they can get cheaply and in volume. Then they begin a promotional campaign to get other investors buying in as well.

How was GameStop shorted over $100? ›

HOW CAN MORE THAN 100% OF A COMPANY'S SHARES BE SHORTED? Once the short seller borrows the shares from the lender and then sells them back into the market, the new owner of the shares is free to lend them out, just as the previous owner did, and have no idea they are on the other side of a short sale.

GameStop Corp retains a regular Real Value of $17.19 per share. The prevalent price of the firm is $24.31. At this time, the firm appears to be overvalued.

GameStop made money in the last quarter of 2022, something it hasn't done in years. The surprising financial results were posted Wednesday, with the company reporting $48.2 million in profit.

GameStop stock is on pace to suffer its largest percent decrease since June 2021 on Thursday. The videogame retailer's stock (ticker: GME), down 19%, fell after the company said its board terminated CEO Matt Furlong, and named activist investor Ryan Cohen as executive chairman.

It still faces an existential crisis as digital downloads and e-commerce marketplaces threaten to render its business model obsolete. The broader post-pandemic decline of the gaming industry has made it even more difficult for GameStop to stabilize its business.

GameStop is the largest video game retailer in the world. The franchise has 5,700 stores in 14 different countries. It is best known to gamers as a place to trade-in and buy pre-owned games. The retailer also sells many collectibles, POP figures, and other licensed merchandise.

The company operates stores under GameStop, EB Games, Game Informer, Electronics Boutique, Zing Pop Culture, Power to the Players, PowerUp Rewards, Micromania and ThinkGeek banners. The company's operations are spread across, the US, Canada, Australia and Europe.

In conclusion, GameStop's competitive advantage is its strong brand recognition, customer loyalty, extensive distribution network, and diversification of its product offerings. However, these advantages may not be enough to overcome the significant challenges posed by the digital disruption of the gaming industry.

GameStop's total debt is about $575 million, of which $378 million is long-term debt. The company's debt cost is 0.8%, which is well below the U.S. retail sector's average — 5%, according to a 2020 report by S&P Global Market Intelligence.

Targets for 2022, 2023 and 2025

The forecaster set a baseline GameStop stock forecast for 2022 of $27.38 by the end of December 2022, up from $25.99 at the time of writing. It further predicted GME could reach $42.47 by the end of December 2023 and close 2025 at $72.54.

When did GameStop decline? ›

The company's performance declined during the mid-to-late 2010s due to the shift of video game sales to online shopping and failed investments by GameStop in smartphone retail.

Topline. GameStop shares rose by more than 30% Wednesday after the video game retailer reported its first quarterly profit in two years, as shares for other meme stocks popularized during the pandemic, including AMC Entertainment and Bed Bath & Beyond, also increased as a result.

GameStop's prospects aren't great as any remaining investors are still reckoning with. It sports a middling 21 IBD Composite Rating. That means its chart and fundamentals only underperform 79% of all companies' And the company is seen losing money in fiscal 2024, ended in January 2024.

Generated net sales of $5.927 billion for the fiscal year, compared to $6.011 billion for fiscal year 2021.

Financial Health criteria checks 6/6. GameStop has a total shareholder equity of $1.3B and total debt of $37.2M, which brings its debt-to-equity ratio to 2.9%. Its total assets and total liabilities are $3.1B and $1.8B respectively.

GameStop Corp (NYSE:GME)

The 2 analysts offering 12-month price forecasts for GameStop Corp have a median target of 13.25, with a high estimate of 20.00 and a low estimate of 6.50. The median estimate represents a -43.01% decrease from the last price of 23.25.

Depending on the amount of stock shorted, a short squeeze can last anywhere between a few days and a few months. One way to calculate this is through the short interest ratio – dividing a company's shorted stocks by its average daily trading volume.

The GameStop stock price run-up essentially resulted from a pump-and-dump scheme. In such a scenario, an investor or investors buy heavily into a low-value stock, something that they can get cheaply and in volume. Then they begin a promotional campaign to get other investors buying in as well.

Historical daily share price chart and data for GameStop since 2023 adjusted for splits. The latest closing stock price for GameStop as of June 07, 2023 is 26.11. The all-time high GameStop stock closing price was 86.88 on January 27, 2021.

GameStop is being called a 'pump and dump' scheme—here's what you need to know. Eric Chaffee, Distinguished University Professor in the UToledo College of Law, discussed how small investors banded together to send GameStop's stock price soaring, prompting Robinhood and other broker dealers to restrict trading.