The GameStop Game Never Stops

I don’t know what to tell you. Maybe I’ll tell you three stories.

Here is a fundamental story. There’s a company called GameStop Corp. It sells video games at the mall. It has over 5,000 stores. For various reasons people do not buy a ton of video games at the mall these days. Two of those reasons are: People do not love going to the mall during a deadly pandemic,1 and people today increasingly buy video games by downloading them directly from online stores.2 Being a mall retailer of video games is not obviously a great business to be in, and this has been reflected in GameStop’s earnings and stock price. In 2011, GameStop reported net income of $408 million on revenue of $9.5 billion; in the last 12 months, it had a net loss of $275 million on revenue of $5.2 billion. GameStop’s stock traded as high as $62.11 per share in 2007; it got as low as $3.50 in March 2020. It closed at $18.84 on Dec. 31, 2020, for an equity market capitalization of about $1.3 billion.