6 ms·

"I think it made about a billion dollars in profit" It raised over a billion dollars of capital (i.e. issued shares in return for cash). It did not make a bill

"I think it made about a billion dollars in profit" It raised over a billion dollars of capital (i.e. issued shares in return for cash). It did not make a billion dollars in profit (and has never had a year when it did).

whamlastxmas 6mo ago
The TLDR for people who don't intuitively understand why: existing shareholders are diluting their stake in the company by issuing new shares and getting money for those new shares. It's simply selling part of the company. Not profit.
- intuitionist 6mo ago
  Worth also pointing out though that if you can sell new shares above intrinsic value that is accretive to existing shareholders. Dilution isn’t always a bad word. (It’s bad for the people buying new shares.)
  - skrbjc 6mo ago
    Basically a ponzi at that point
    - gruez 6mo ago
      Bubble? Yes. Ponzi? No. The latter requires some element of deception/fraud. Strategy Inc. (formerly MicroStrategy) was basically something similar. They had $x worth of bitcoin in a vault, but were selling themselves for $2x.
      - arcticbull 6mo ago
        Well they are raising capital to hand out in dividends on their preferred stock. So that's much closer.
  - CobrastanJorji 6mo ago
    Well, partly it's an audience thing. Hacker News has a lot of folks who work at tech startups, and if you work at a tech startup, dilution is nearly always a very bad word for you.
    - rahimnathwani 6mo ago
      If you work at a tech startup then you probably hope your company raises an additional round of funding, i.e. you hope you get diluted.
      - LtdJorge 6mo ago
        Isn’t that done with already existing shares (from the founders)? Then it wouldn’t be dilution.
        rahimnathwani 6mo ago
        No. The main purpose of a funding round is for the company to sell shares and receive cash (e.g. to spend on marketing), not for founders to sell shares and receive cash (e.g. to spend on Ferraris). (Sometimes, at the same time as a funding round, founders may also sell some existing shares to the new investors.)
  - mcmoor 6mo ago
    Yeah I'm also always confused whenever I heard that a company issues new stocks. Why would existing shareholders agree for that? If there's more comprehensive resources about this I'd love to read it.
- ball_of_lint 6mo ago
  You're conflating two things here. Yes, in 2021 GameStop did sell shares to raise cash in a dilutive way. [1] No, that is not being treated as profit or revenue. Gamestop had ~418 million in profit in 2025. [2] A fraction of that profit does come from interest income. Ignoring that (say to value the business separate from the cash) they still made ~110 million in profit. In my personal opinion (not financial advice) Gamestop with the cash it has today is a much more attractive investment than without. If you have worries about an economic downturn, it's a hedge. If you worry about GameStop being able to maintain it's current revenue/profit or volatility, it's runway. There's a variety of ways it reduces the risk of an investment. [1] https://investor.gamestop.com/news-releases/news-details/2021/GameStop-Completes-At-The-Market-Equity-Offering-Program-06-22-2021/default.aspx https://investor.gamestop.com/news-releases/news-details/202... [2] https://www.sec.gov/Archives/edgar/data/1326380/000132638026000013/gme-20260131.htm https://www.sec.gov/Archives/edgar/data/1326380/000132638026... page 27 has the consolidated results.
  - sanswork 6mo ago
    >A fraction of that profit does come from interest income. More than half of it came from interest income. Gamestop has been unable to grow revenue since Cohen took over, failed initiative after failed initiative. The only thing saving them is their meme stock nature and a legion of people willing to throw good money after bad allowing them to dilute shareholders to build a warchest. They have increased profit by closing something like 50% of their stores but you can't grow a retail company by constantly closing stores at some point you have to find a way to make the stores more profitable and in 5 years with tons of different attempts they've not found that. Revenue is down almost 50% in the past 3 years. Having a pile of cash doesn't matter if you have a leader who has no good ideas for how to invest it to improve returns for shareholders, all it does is allow you to die for longer.
    - ball_of_lint 6mo ago
      Well hey, what do you think about them buying eBay? eBay seems to think a lot of the value is in verification - grading cards, authenticating watches, shoes, handbags. GameStop has a similar business in collectibles and could provide eBay with a physical footprint that would let a lot of that verification happen easier, in-store.
asynchronous13 6mo ago
Key financial results for Gamestop from the recent fiscal year (2025–2026) include: Net Income: $418.4 million Gross Profit: $1.196 billion Total Revenue: $3.63 billion Operating Income: $285.9 million
- turtlesdown11 6mo ago
  Operating income was $232.1 million, not $285.9 million. https://investor.gamestop.com/news-releases/news-details/2026/GameStop-Reports-Fourth-Quarter-and-Fiscal-Year-2025-Results/default.aspx https://investor.gamestop.com/news-releases/news-details/202... That total revenue also declined 5% YoY
  - 59percentmore 6mo ago
    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.
    - turtlesdown11 6mo ago
      Total revenue has declined for several years, -27% in 2024, -11% in 2023 (2023 rev was $5.9b, to $3.6b in 2025, this is a shrinking business).
      - arcticbull 6mo ago
        They haven't had a genuinely good year in the last 15 years. Their TTM revenue is down 66% from what it was in 2012. In nominal dollars. In real dollars it's down 75%. https://www.macrotrends.net/stocks/charts/GME/gamestop/revenue https://www.macrotrends.net/stocks/charts/GME/gamestop/reven...
        59percentmore 6mo ago
Veedrac 6mo ago
You can't normally describe it as profit because stocks by rule trade at a fair price, but it's surely reasonable to consider in this case GME making a profit from the squeeze given they were selling a good well above fair acquisition price.
- ashika 6mo ago
  no, they issued more stock. stock is a claim on corporate equity, ie the delta between assets and liabilities. existing stock holders' claim to equity gets diluted when this happens, but share prices will often not be effected proportionally, making it appear the company has "made a billion dollars" when in fact they've just split the same pie into smaller pieces and managed to sell it at the same price. ryan now seems to think he can issue shares to acquire ebay, which will be much harder than fleecing retail.

whamlastxmas 6mo ago

The TLDR for people who don't intuitively understand why: existing shareholders are diluting their stake in the company by issuing new shares and getting money for those new shares. It's simply selling part of the company. Not profit.

intuitionist 6mo ago
Worth also pointing out though that if you can sell new shares above intrinsic value that is accretive to existing shareholders. Dilution isn’t always a bad word. (It’s bad for the people buying new shares.)
- skrbjc 6mo ago
  Basically a ponzi at that point
  - gruez 6mo ago
    Bubble? Yes. Ponzi? No. The latter requires some element of deception/fraud. Strategy Inc. (formerly MicroStrategy) was basically something similar. They had $x worth of bitcoin in a vault, but were selling themselves for $2x.
    - arcticbull 6mo ago
      Well they are raising capital to hand out in dividends on their preferred stock. So that's much closer.
- CobrastanJorji 6mo ago
  Well, partly it's an audience thing. Hacker News has a lot of folks who work at tech startups, and if you work at a tech startup, dilution is nearly always a very bad word for you.
  - rahimnathwani 6mo ago
    If you work at a tech startup then you probably hope your company raises an additional round of funding, i.e. you hope you get diluted.
    - LtdJorge 6mo ago
      Isn’t that done with already existing shares (from the founders)? Then it wouldn’t be dilution.
      - rahimnathwani 6mo ago
        No. The main purpose of a funding round is for the company to sell shares and receive cash (e.g. to spend on marketing), not for founders to sell shares and receive cash (e.g. to spend on Ferraris). (Sometimes, at the same time as a funding round, founders may also sell some existing shares to the new investors.)
- mcmoor 6mo ago
  Yeah I'm also always confused whenever I heard that a company issues new stocks. Why would existing shareholders agree for that? If there's more comprehensive resources about this I'd love to read it.
ball_of_lint 6mo ago
You're conflating two things here. Yes, in 2021 GameStop did sell shares to raise cash in a dilutive way. [1] No, that is not being treated as profit or revenue. Gamestop had ~418 million in profit in 2025. [2] A fraction of that profit does come from interest income. Ignoring that (say to value the business separate from the cash) they still made ~110 million in profit. In my personal opinion (not financial advice) Gamestop with the cash it has today is a much more attractive investment than without. If you have worries about an economic downturn, it's a hedge. If you worry about GameStop being able to maintain it's current revenue/profit or volatility, it's runway. There's a variety of ways it reduces the risk of an investment. [1] https://investor.gamestop.com/news-releases/news-details/2021/GameStop-Completes-At-The-Market-Equity-Offering-Program-06-22-2021/default.aspx https://investor.gamestop.com/news-releases/news-details/202... [2] https://www.sec.gov/Archives/edgar/data/1326380/000132638026000013/gme-20260131.htm https://www.sec.gov/Archives/edgar/data/1326380/000132638026... page 27 has the consolidated results.
- sanswork 6mo ago
  >A fraction of that profit does come from interest income. More than half of it came from interest income. Gamestop has been unable to grow revenue since Cohen took over, failed initiative after failed initiative. The only thing saving them is their meme stock nature and a legion of people willing to throw good money after bad allowing them to dilute shareholders to build a warchest. They have increased profit by closing something like 50% of their stores but you can't grow a retail company by constantly closing stores at some point you have to find a way to make the stores more profitable and in 5 years with tons of different attempts they've not found that. Revenue is down almost 50% in the past 3 years. Having a pile of cash doesn't matter if you have a leader who has no good ideas for how to invest it to improve returns for shareholders, all it does is allow you to die for longer.
  - ball_of_lint 6mo ago
    Well hey, what do you think about them buying eBay? eBay seems to think a lot of the value is in verification - grading cards, authenticating watches, shoes, handbags. GameStop has a similar business in collectibles and could provide eBay with a physical footprint that would let a lot of that verification happen easier, in-store.

asynchronous13 6mo ago

Key financial results for Gamestop from the recent fiscal year (2025–2026) include: Net Income: $418.4 million Gross Profit: $1.196 billion Total Revenue: $3.63 billion Operating Income: $285.9 million

turtlesdown11 6mo ago
Operating income was $232.1 million, not $285.9 million. https://investor.gamestop.com/news-releases/news-details/2026/GameStop-Reports-Fourth-Quarter-and-Fiscal-Year-2025-Results/default.aspx https://investor.gamestop.com/news-releases/news-details/202... That total revenue also declined 5% YoY
- 59percentmore 6mo ago
  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.
  - turtlesdown11 6mo ago
    Total revenue has declined for several years, -27% in 2024, -11% in 2023 (2023 rev was $5.9b, to $3.6b in 2025, this is a shrinking business).
    - arcticbull 6mo ago
      They haven't had a genuinely good year in the last 15 years. Their TTM revenue is down 66% from what it was in 2012. In nominal dollars. In real dollars it's down 75%. https://www.macrotrends.net/stocks/charts/GME/gamestop/revenue https://www.macrotrends.net/stocks/charts/GME/gamestop/reven...
      - 59percentmore 6mo ago

Veedrac 6mo ago

You can't normally describe it as profit because stocks by rule trade at a fair price, but it's surely reasonable to consider in this case GME making a profit from the squeeze given they were selling a good well above fair acquisition price.

ashika 6mo ago
no, they issued more stock. stock is a claim on corporate equity, ie the delta between assets and liabilities. existing stock holders' claim to equity gets diluted when this happens, but share prices will often not be effected proportionally, making it appear the company has "made a billion dollars" when in fact they've just split the same pie into smaller pieces and managed to sell it at the same price. ryan now seems to think he can issue shares to acquire ebay, which will be much harder than fleecing retail.