Wednesday March 24th 2021
Despite the boom in online business
Gamestop continues to get into trouble
Organized retail investors are pushing the Gamestop rate up at the beginning of the year – much to the annoyance of large hedge funds. The soaring of the video game retailer is history again. A look at the current business figures reveals that the company is still in crisis.
The video game retailer Gamestop, known for its spectacular stock turbulence, continues to suffer from business losses. In the three months to the end of January, sales fell three percent year-on-year to $ 2.1 billion, around 1.8 billion euros, as the company announced on Tuesday after the US market closed. The profit rose, not least thanks to lower expenses, from $ 21.0 million to $ 80.5 million. In addition, online sales increased by 175 percent. However, market expectations were disappointed.
Gamestop made headlines in January with a speculative battle on the stock exchange. The company has actually been in crisis for a long time, but driven by small investors organized on the Internet, the shares had rallied breathtakingly. That in turn broke hedge funds that bet on a price decline, huge losses. In January the stock had hit a record high of over $ 483, but the soaring was quickly over. Most recently, the papers cost just under $ 182.
In view of the extreme volatility of prices and the high level of attention caused by the turbulence on the stock market, the financial report serves as a kind of reality check for – viewed soberly, relatively dreary – day-to-day business. In the entire past fiscal year, Gamestop’s revenues fell by around 21 percent to $ 5.1 billion. The bottom line was a loss of $ 215.3 million.
The branch business with video games is not considered to be a major growth driver anyway and suffers even more in the pandemic. But although analysts haven’t trusted the company much for a long time, a die-hard fan base has formed in Internet forums.
One of their hopes is investor Ryan Cohen, who took over a position on the board of directors in January and turned pet supplies retailer Chewy inside out with a successful e-commerce strategy. Gamestop fans like Youtube star Keith Gill known as “Roaring Kitty” see a lot of untapped potential and believe the company will get back on track.
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