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>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 Cohe

>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 5mo 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.
- sanswork 5mo ago
  I honestly don't know anything about ebay these days to comment on them but many many people have tried to make a business of providing a storefront for ebay in the past and they've basically all failed so I don't think that bodes well for the main offering Gamestop has. Also Gamestops verification business is not done in stores AFAIK. I'm pretty sure they've just partnered with PSA to allow you to drop off cards at stores but they are sent away to be authenticated. The stores don't really add any value for most people in this transaction and add a potential downside in that there are multiple reports of Gamestop store employees stealing cards handed over for grading. Training retail employees to be proper verifiers seems like a huge risk and a huge cost since you need to train them up on how to handle everything where with centralised grading locations you can have specialists(think antiques roadshow).
- hattmall 5mo ago
  The verification stuff is minimal. That's not where eBay makes it's bulk of money but it's a reasonable growth area. There's a huge opportunity though for eBay or someone to tie several loose ends and concepts together and have a serious competitor to Amazon.
trollbridge 5mo ago
Not growing revenue yet being profitable seems far preferable to growing revenue yet having bigger and bigger net losses. Shareholders seem to agree, as the stock went from formerly around $2.50 to present day about $92 (accounting for splits), dispute the dilution.
- turtlesdown11 5mo ago
  >Not growing revenue 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.
  - trollbridge 5mo ago
    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.
    - turtlesdown11 5mo ago
      > 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.
      - trollbridge 5mo ago
        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.

ball_of_lint 5mo 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.

sanswork 5mo ago
I honestly don't know anything about ebay these days to comment on them but many many people have tried to make a business of providing a storefront for ebay in the past and they've basically all failed so I don't think that bodes well for the main offering Gamestop has. Also Gamestops verification business is not done in stores AFAIK. I'm pretty sure they've just partnered with PSA to allow you to drop off cards at stores but they are sent away to be authenticated. The stores don't really add any value for most people in this transaction and add a potential downside in that there are multiple reports of Gamestop store employees stealing cards handed over for grading. Training retail employees to be proper verifiers seems like a huge risk and a huge cost since you need to train them up on how to handle everything where with centralised grading locations you can have specialists(think antiques roadshow).
hattmall 5mo ago
The verification stuff is minimal. That's not where eBay makes it's bulk of money but it's a reasonable growth area. There's a huge opportunity though for eBay or someone to tie several loose ends and concepts together and have a serious competitor to Amazon.

trollbridge 5mo ago

Not growing revenue yet being profitable seems far preferable to growing revenue yet having bigger and bigger net losses. Shareholders seem to agree, as the stock went from formerly around $2.50 to present day about $92 (accounting for splits), dispute the dilution.

turtlesdown11 5mo ago
>Not growing revenue 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.
- trollbridge 5mo ago
  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.
  - turtlesdown11 5mo ago
    > 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.
    - trollbridge 5mo ago
      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.