GameStop is still losing money in every region it operates in
It’s not very common for the following four things to all be true about a company:
(1) Sales are falling.
(2) The company is losing money in its primary business in every region where it operates.
(3) The company still generates a profit, overall.
(4) The company has billions of dollars more cash on its balance sheet than it did a year ago.
But then again, GameStop is not a very normal company.
Yesterday, GameStop reported its third-quarter earnings: while sales dropped 20% year over year, the video game retailer turned around to a $17.4 million profit — from the $3.1 million net loss in the same quarter last year — thanks to aggressive cost-cutting efforts and interest income from its growing cash pile. Following last week’s brief share spike fueled by meme-stock influencer Keith Gill’s post on X, GameStop’s shares are now up more than 75% year to date.
After hogging the meme-stock limelight for the last few years, GameStop management has done a very good job of cashing in on retail appetite for its shares, even as demand for its actual products — video game hardware and software — continues to ebb. As Luke Kawa puts it: “GameStop is still terrible at being a retailer. But it’s not bad at being a money-market fund.”
But then again, GameStop is not a very normal company.
Yesterday, GameStop reported its third-quarter earnings: while sales dropped 20% year over year, the video game retailer turned around to a $17.4 million profit — from the $3.1 million net loss in the same quarter last year — thanks to aggressive cost-cutting efforts and interest income from its growing cash pile. Following last week’s brief share spike fueled by meme-stock influencer Keith Gill’s post on X, GameStop’s shares are now up more than 75% year to date.
After hogging the meme-stock limelight for the last few years, GameStop management has done a very good job of cashing in on retail appetite for its shares, even as demand for its actual products — video game hardware and software — continues to ebb. As Luke Kawa puts it: “GameStop is still terrible at being a retailer. But it’s not bad at being a money-market fund.”
