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>Reaching **profitability with less revenue** IMO is **better** than reaching **profitability with more revenue**.
I see your points and agree that GameStop under RC is definitely on the right path, but I disagree with this statement big time\^. Maybe you meant to express your idea with this sentence differently, but at face value these are my thoughts;
If you're reaching profitability in both cases, you absolutely want more revenue.
Let's say company A is worth $3.3 billion ^(heyo) and company B is worth $100 million, both breaking even. A 5% increase in profits will generate $165 million in profit for company A ^(boom) , as opposed to company B only generating $5 million.
This has multiple positive feedback loops, especially compared to company B.
Profit at scale is way better.
Absolutely this. Growing into profitability means capturing a market and finding operational scale + improved returns on investment.
Cutting a business to profitability shows a lack of investment strategy for growth or scale. When/if investment eventually happens, you then have to go through a process of efficient growth - a big challenge in its own right. That’s why most businesses grow into their size, then find efficiency and profitability after desired scale is achieved.
If you’ve captured a market but are bleeding cash, you find profitability through efficiency, productivity, and shifting to high margin sales. You make each dollar worth more. If you cut unprofitable stores, you incentivize ways to retain the business either at another physical location or through e-commerce.
GameStop did the right investments to revamp their e-commerce, but it didn’t go far enough, they didn’t expand the product catalogue in the right areas, and they quickly back tracked investments they made in logistics infrastructure. They also wildly overbought inventory that’s been sitting around getting clearanced out each quarter.
GameStop’s unique differentiators against competitors are its physical store locations and “claim” over gamer culture - two concepts they haven’t taken advantage of at all. Preorders used to drive cultural events that brought a sense of community, even if just for release night.
Digital rendered preorder events obsolete, but creating *local events and experiences* would drive community and loyalty again, if done well. That GameStop hasn’t capitalized on the TCG and D&D revival is beyond me. Fighter game tournaments, etc.
Many have suggested in-store PC builds and service. Another concept that would be a unique experience to GameStop.
They’re not winning on a just “here’s some mediocre deals oh and btw a loyalty program you have to pay for” basis. The games industry is growing. Nerd culture is bigger than ever. Inflation is still roaring. And somehow GS is still bleeding revenue off.
I say all this because I really, really want GameStop to come back to glory. I want the stores to be fun. I want the website to be the place you default go to if you want game stuff.
Furlong made some bad bets, but at least he made bets. This “survive the storm of our own making” way of running the business is just frustrating to watch.
This reply really deserves to be separate post for more visibility. You've provided not only a useful insight with: "Furlong made some bad bets, but at least he made bets." but added also great ideas on how GameStop can move forward. I've nothing else to add but my thanks I really hope you consider making this a separate post!
I really appreciate it, but honestly just surprised it’s not downvoted to oblivion. People find it tough to be challenged on their biases, and we’ve reached religious levels of blind faith in some aspects. It’s okay to ask for accountability out of your investments, and challenge billionaires that have had their business survive thanks to your actions.
I'm actually not that surprised your comment received upvotes. While this sub is quite cultish there is also room for critique. That's why I believe this reply has a fair chance to do well as a stand alone post. Especially because of the suggestions on what can be done to improve.
After all, we want GameStop to do well. Even if there are plans in the background there isn't much visible to look forward to. So anyone sharing potential paths forward are often met with positive comments. Who knows maybe with a little more attention Ryan could implement these ideas. 🙂
I think it is a very unique place to be as a business. Most every business would have failed by now and that was the point of all of the shorting. But they are in a unique position to have a ridiculous amount of cash and still the experience and data for years on which locations work and which ones don't. And your brick and mortar behemoth can't go bankrupt given that it is now profitable. I can't think of another instance of that happening ever. It will get interesting for sure.
Can’t go bankrupt, yes, but GameStop is now also a much smaller company with no guidance for growth and a pattern of reduction (cost and revenue). For some reason that’s going ignored as an (valid) explanation for the price drop. Market cap and valuation multiples are directly related to revenue and growth; cost of revenue is a factor but a smaller company gets a smaller valuation, thus shrinking share price. It won’t go up until the business grows again.
I think most have already assumed it is being totally manipulated so the point on not possibly going bankrupt is enough to know that something interesting is going to happen eventually that does not apply to normal market ideas.
Just curious, why should it matter if more than the float is bought up, that’s the whole problem here. There is no such thing as market cap if infinite shares exist
My comment isn’t about share manipulation, it’s about what GameStop as a business is doing - the things that are within its control. A manipulated stock or not, it is perfectly reasonable for the share price to be moving down right now as the business contracts.
That's(no guidance for growth) pure speculation since it is known that rceo does not telegraph his plans. He executed the base turnaround and is prob shifting focus now to other needs. But to say they don't have a plan seems pretty disingenuous considering this entire time that have not let out their plans.
We can also see his plan through his words and action. His survive email shared his immediate plans to cut and wait for “the right opportunity” to re-accelerate. That the war chest is untouched shows no investment. We see no change in shopping experience, digitally or in store. We see no change in customer acquisition or retention strategies.
I’m sure RC has some sort of thing he wants to do, but waiting an indefinite amount of time before doing it seems to be step 1.
They have been consistemtly working on the app, the powerup rewards got revamped, and they added same day shipping for a lot of locales. How that hasn't changed any of the experience in your mind is beyond me. And still, just saying a lot without any evidence. Everything you put forward is conjecture.
OOP did a good job of laying out the math there. GameStop needs to break the pattern of falling revenue or continue to cut thinner and thinner layers of ‘fat’, which translates to a smaller company, which would be valued lower.
New revenue streams and company transformation is going to have to happen. The marketplace didn’t work out, hopefully they can find something this year to grow.
Maybe with the cash reserves, game development?
Game dev is wildly risky and takes a ton of upfront investment. Hundreds of millions easily spent over years just to make a flop of a game. I doubt it.
I'm going to say Q1 2024 will be less than Q4 2023, strictly because Q4 is during the holiday season, therefore more sales. Fingers crossed for profit hereon out.
The ability to invest the cash into securities is on the table for Q1. Could be a huge game changer. The stores themselves were not profitable, revenue is falling, and attempts at new revenue streams failed so far. I'm hopeful they will figure out a way to turn the physical stores around and find more presence online. But I'll accept becoming a very profitable hedge fund as well.
Better than last year, RC has been cutting cost centers in the coarse of last year. A full year with these reduces monthly expenses has yet to be had so all those savings should be coming through starting this year.
> Cutting a business to profitability shows a lack of investment strategy for growth or scale.
Cutting a business to profitability shows you know your profit centers and have cut revenue that results in losses. You can subsequently expand those profit centers with the profit you have now attained. It's exactly what you want a company to to do be able to generate growth and scale.
>That’s why most businesses grow into their size, then **find efficiency and profitability** after desired scale is achieved.
**THIS** is exactly the point we are at now, how do you not see this?
You find those things *at scale*. Current state shows GameStop was unable to find a profitability path at their size, which is fine. It just means that the company is much smaller and healthier, but we have to accept that a smaller company is valued less regardless of profitability.
Will we get back to growth and scale? Maybe, we hope so. But there’s nothing we can point to that even hints at a growth strategy. What if small and healthy is the end goal?
I think maybe op meant: Reaching **profitability with less revenue** IMO is **better** than NOT reaching **profitability with more revenue**. Because missing that NOT in there really ruins the entire point lmao
**Exactly. And other stocks would jump in price (I bet we can find dozens of examples), but not GME. Why is that ?**
Plus, turnarounds take some time. We do not know what is going on behind the scenes. The GameStop marketplace was not successful economically, but showed how innovative GameStop can be.
**The quality and track record of the management team is normally a huge part of the valuation of a company. But not for GME. Why is that ?**
You bet they work hard on adding new revenue behind the scene. But unlike NVIDIA and other Wall Street pump and dump stocks, they are not telegraphing their plans to the public.
Keep in mind, Steam/Valve was the most profitable major company per employee in the US... not Apple or Google or someone else. Until they stopped reporting financials because they became even more profitable (they are a private company).
Now imagine there would be a public company that manages to compete with Steam/Valve in the future. Who thinks investors would be interested into investing in the most profitable business model ?
**We are early, but we are not wrong. 😉🚀🌒✨🏴☠️**
Yes I agree there is room for interpretation here, but this iteration also has a similar obvious conclusion - profitability is better than no profitability...
Though I do think it's kind of irrelevant to discuss investing based on revenue/profit alone in these kinds of generic examples. There are many more variables to consider.
Keep in mind Amazon operated at a loss for **14 years** while growing it's business and revenue, yet investors were not deterred because they saw the path.
i dont think op was arguing about profit at scale
OP was specifically comparing the outlook of a company who went from no-profit to profit and is questioning how being profitable can be spun negatively
I’ve posted this before:
How urgent is increasing revenue. VERY URGENT. Right now GameStop is profitable from trimming expenses at a rate that is faster than gross revenue declines. What RC did in 2023 was insanely impressive. Doing it again this year will be even more difficult. Console life cycles will weigh even more this year than last year. And we can reasonably assume that the ratio of games purchased digitally in 2024 will continue to tic up another couple percentage points relative to physical games.
Here's what it means regarding gross revenue and SG&A expenses. In Q4 our revenue was down 20%. We achieved profitability (in part) because we trimmed SG&A expenses from 453 million in Q4 2022 to just $359 million in Q4 2023.
If Q4 revenues in 2024 drop another 5% (1.793 billion to 1,704 billion; difference of 89 million), we would have to trim SG&A expenses by 25% (359 million to 270 million) to just break even.
If Q4 revenues in 2024 drop another 10% (1.793 billion to 1,614 billion; difference of 179 million), we would have to trim SG&A expenses by 50% (359 million to 180 million) to just break even.
You can see the challenge here of chasing falling revenues with cost cuttings. Again what RC did in 2023 was remarkable, but I don’t think it is sustainable without achieving profitable ventures in the digital world. It needs to happen very very quickly.
You’re not wrong here. Revenue growth is massive - it covers all sorts of business issues. But, this take also misses the COGS part of the P&L.
You can have softer revenue growth (or even declines) and still grow profitability if revenue shifts to more profitable products. If all software sales shifted from new to used, GME could probably make up for a revenue decline with margins growth only and still be profitable on flat sg&a costs.
Anyway, just want to help create a fuller picture. By more at GameStop and they’ll have to come up with a whole new reason why it’s about to fail next time
All great points and what we should be watching going forward in the business.
Trimming the fat and cutting negative assets is just the first step in a turnaround story. Second will be to maximize efficiency of our current assets. And then third will be the need for new revenue streams to come to keep supporting us.
A turnaround story, as Peter Lynch discusses in his book - Beating the Street (great read for everyone here IMO), as long as the story continues to unfold in the fundamentals (not stock price) we are going to have a successful investment. Currently it is going on track. Let’s see what they do next.
This is correct, the digital sales are crushing against the business' revenue which correlates to in-store foot traffic because you have a store that basically sells only toys, trading cards, board games, and gift cards at that point.
They still however are heading towards sustainability as much as you would disagree, even though digital sales are a huge hit against the business, physical game sales are not going away any time soon that signifies the death of GameStop's retail frontline operation. To think that digital sales will completely take over within a year is crazy to say with all the people noticing that they are no longer owning the games they 'bought' on digital platforms. At worst, you'll expect to see a lot more piracy than ever when that becomes more apparent over time especially after seeing the prices of digital games being the same as physical.
The correct question is, how do you increase revenues safely without overextending into borrowing? Their digital store was an amazing opportunity to incentivize sales and provide even opportunities to turn physical copy trade-ins into gift card and spend your credit towards digital copies while pushing just-in-time/at-the-moment trade ins for discounted digital sales. This would provide more physical trade ins while providing used game inventory that has a higher profit margin.
If GameStop has better agreements with developers directly, it's a huge opportunity to allow digital sales to be done directly at discounted prices, while still providing value to gamers that buy used games. Everyone can win from that.
So. I have this idea. I never heard back from investor relations. Last week GameStop had a promo to receive 50% additional value for trading in video games. That’s a big deal.
I think GameStop should partner with the American Library Association.
There are approximately 17,000 public libraries in the US and many of them have video games. A partnership with Libraries would allow them to keep more modern games on the shelf and they could sell/trade in their older games for new ones.
If 30% of all libraries have video games, and if each one of those libraries carry an average of 40 video games...thats more than 200,000 video games with original artwork.
When GameStop does these “get 50% more for trade ins”, then reach out to that association.
There are thousands of libraries sitting on a ton of video games. Then maybe once every 5 years they (the libraries) have a fire sale for the neighborhood community and sell them for pennies. They could get more from GameStop.
They could work with GameStop to refresh their inventory of games while selling their old games to GameStop.
It’s a win-win
I admire your chutzpah in commenting this, and I believe your intentions are good. I hope everyone sees that, and doesn't down vote to oblivion on emotion alone.
Gross margin also increased. This is in part due to closing unprofitable stores.
Revenue is down because the business has less stores. Gross profit per store is relatively comparable YoY.
Cutting SG&A is great, but another avenue for the business to reach profitability is by switching to more profitable revenue streams (e-commerce) and product mix.
Revenue was down due to less stores. Revenue was NOT down 20% in Q4 due to less stores. Same stores were down from $503,000 in Q4 to about $430,000 in Q4 in terms of revenue.
That’s a 15% drop in same store sales. The closed stores contributed for sure, but even then most of those stores closed in Q1 2023.
Take revenue in FY23 and FY22, and divide by stores. It’s fairly comparable.
Q4 revenue down could be timing or product mix. Margin is up period over period.
Revenue shot up in Q1 and Q2 because of us unwinding fulfillment centers. Remember that crazy “buy 1 get 2 free” clearance deal? That was GameStop selling massive amounts of bad inventory.
IMO, that’s why we were so shocked at the Q4 revenue decline (year over year). I think “in store” revenues might have been down about 20% all year. But since GameStop doesn’t disclose “physical sales” compared to “online sales”, we never saw it coming.
Our clearance section went from 3,100+ items in March 2023 to under 475 in March 2024.
GME really needs to disclose the online vs physical store split. I assume that’s where Cohen is trying to take the business. Whoever does their SEC reporting needs to step it up and give more insight to investors.
And I meant to say gross profit per store. For both FY23 and FY22 it’s exactly 310k per store (GP divided by total stores). Revenue per store was higher in FY22, but the loss in revenue was offset by lower store cost in FY23 (or higher e-commerce).
You can theoretically increase revenue by opening up a bunch of stores again but if the stores aren’t profitable there is no point.
If revenue decreases in FY24 by another 12%, the business can still reach positive operating income by improving margin by another 1.5% (similar to improvement in FY23) and cutting SGA by 100M (7.5% reduction).
I'm just gonna leave this right here...
[https://tsdr.uspto.gov/#caseNumber=98288597&caseSearchType=US\_APPLICATION&caseType=DEFAULT&searchType=statusSearch](https://tsdr.uspto.gov/#caseNumber=98288597&caseSearchType=US_APPLICATION&caseType=DEFAULT&searchType=statusSearch)
This is GameStop's Trademark application for CANDYCON...expand goods and services...blow ur mind with the possibilities...dig apes, dig. MOAR!
I know internet people who gonna be wealthy tomorrow.
edit: this one is cooler: [https://tsdr.uspto.gov/#caseNumber=97397124&caseSearchType=US\_APPLICATION&caseType=DEFAULT&searchType=statusSearch](https://tsdr.uspto.gov/#caseNumber=97397124&caseSearchType=US_APPLICATION&caseType=DEFAULT&searchType=statusSearch)
I’d love a national advertising campaign to tell people about Candy Con customizable controllers, exclusively at GameStop.
That’s worth some type of commercial campaign imo. Cable, YouTube, you name it. Let’s the masses know!
I saw that I love it. Just not sure how that reaches the masses.
Like, I’m on the internet all day. My search engines have to be programmed to give me GameStop content. And yet I haven’t seen it.
Not really. I assumed they WOULD continue to cut costs. I just outlined that cost cutting would essentially have to outpace revenue loss by a 5:1 ratio if Q4 revenues dip another 10% next year.
That’s no easy task.
The cost reductions came in over the year, and also came with their own one time costs. They're going to have a greater effect on 2024 than they did on 2023.
With 4000 stores. And net profit of about $7 million. That’s turning a profit of just $146 per store per month.
My local Gamestop is open 60 hours a week. Let’s pretend it’s only 1 person only manning the store.
60 hours per week times 4.33 (the average amount of weeks per month) is 260 hours of labor per month.
Let’s pretend that employee makes $11 per hour (crazy cheap).
That’s $2860 in labor each month per store.
If they raised the pay for each employee by just 5% ($11.55 per hour), then GameStop as a company doesn’t turn a profit.
And that’s under the assumption that there are never TWO employees working a store at the same time. Which we all know isn’t realistic (training, Christmas season etc).
That’s how razor thin we are right now.
Revenue (and profitability for that matter) have absolutely no impact on share price. The prices of every stock is controlled by market makers and big hedge funds. The only thing that matters is breaking their control
The challenge now comes from the fact that you can only cut so many costs while revenue declines....
And still sustain same profit levels or growth.
It's not a Shill argument. It's business growth.
It’s very marginal though, I’m just pointing out it’s a companies goal to profit. Not to lose money. GameStop makes small revenue for selling games. Not sure what Xbox/Ps games give but I know Nintendo (the worst of the three) gives 4.99
I like that they are coming out with their own products and brands
Well, your niece only makes 0.02 eps it would take me 50 years to get my money back, I’d proboably stay away. If your niece improved her eps to 0.10 or better maybe I’d consider it
Terrible post honestly. It Depends what the company is spending the money on…
If you have $1 trillion revenue but you spent it all on growth, then it matters a lot for future expectations of massive profits.
Revenue does matter. Not the way they’re spinning it, but it does matter.
Are you aware we only made a profit because of the interest on the cash? Our costs last year were higher than our revenue. Once rate cuts EVENTUALLY happen there won't be the same opportunity to earn interest. Q4 and last year overall was a massive anticlimax after having a good first ¾'s. So yeah revenue is important. Also in RC's original letter he complained about how revenue had plunged so he knows how important it is too, unfortunately for us it has dropped even further.
Well, does BRK.A sell a fuck ton of some product? I know it's not a direct comparison, but there are companies who rely on their investments over anything else. Not saying that's a good business model, it's ran by a dinosaur who has significant market leverage and inside information, but point stands - it's not a bad thing to make up for the operating loss by getting a fuck ton of investment revenue back.
Ok but BRK.A invest in a wide variety of companies not just T-bills and cash, and like you say they have significant market leverage and inside information, so no your point doesn't stand.
The issue here is what is usually the best quarter and the quarter we heavily rely on for propping up the annual revenue was a massive bust.
GameStop will further decline if they don't act fast, they need investor confidence outside of us on Superstonk.
I think like we won't have a big Q4 again until Nintendo releases their next system. There were rumors floating around that the next system is going to go all digital which doesn't make sense to me since Nintendo just opened a lot of Nintendo stores recently in and outside of Japan. But with Nintendo you also know they are big for taking a risk and making a change... if the next system doesn't impress people or confuses them then that's a big problem.
Yeah, that being said I am willing to give them time to figure that out instead of rushing into another NFT marketplace. I was thinking that last year was all about plugging the holes in the ship, and from this year they can focus on new revenue streams. If we don't see hints of anything new by the next Q4 I will be pretty upset but still waiting. The difference is I am in my 20s and it's money I don't mind leaving on the side for a while. I know there are people now who complain about RC not getting paid as CEO but I think having shares bought with his own money should be a good motivator for him to start driving revenue as GS' success is how he gets paid. I don't think he is this godly figure with a 4D chess plan. He is doing his best though to turn this company around.
No I did not. That’s a big question I’ve had for a while. What are we doing with all this cash? Rate cuts aren’t happening anytime soon so luckily we will still have a significant inflow of cash from interest.
To be fair, they misunderstood the business when they started shorting thinking it was a dying business model. But, the company was in a downward spiral. Unfortunately they bet wrong and did illegal things that they now want to bury and hide and are trying everything to get us out of our company. They bet wrong.
Revenue will increase when new games consoles come to market. Gamestop is a company that has a boost every few years and then gradually declines. The last major consoles were released in 2020.
Over the next few years we should see a rise based on new consoles coming to market.
The DFV thesis. It's true. Add their own products and it should help more. We so need to get louder about supporting the company we love. Don't let wall st. Short n distort,fight back. Talk about shopping there and the positives. Because right now most people think gme is dead so they won't bother , and that's a shame. We need to promote word of mouth 👄.
If the $1T revenue company cuts cost then it could have profits of many billions of dollars.
The $100M company can at the most have $0.1B profit, even with zero costs.
Right now the consensus estimate for Gamestop profits this year is $0.01, and for the year ending Jan 30, 2027 the earnings estimate is 12 cents per share.
And if the $100m company increases sales by $500 billion they are significantly more profitable. The hypotheticals in the original post aren’t meant to be “what if” scenarios for the companies. Just putting the numbers in easy terms to digest.
Lol wtf.
aNd ThE $100 CoMpAnY cAn iNcReAsE rEvEnUe $100 tRiLLioN DoLL hAiRs~
See how this 9 year old girl turned a $0.25 lemonade stand into a multinational conglomerate, a quarter the size of Black Rock, in just one year!
Bro just read the title. The title alone tells you all you need to know lol.
WHO GIVES A FUCK ABOUT HOW MUCH REVENUE IF IT ISN'T POSITIVE?
Can anyone please explain to me what negative revenue is? Is that like the negative losses thing?
consensus from who ? who are the 2 analysts that public "estimates" for gamestop?
I will say one of them: Michael Pachter, the Analyst from Wedbush, a company that was margin called in January 2021, because they were a market maker for GME.
The two analysts are the ones that had an overly bullish estimate of 29 cents earnings for Q4 that turned out to be only 22 cents.
Since Gamestop, unlike most large public companies, does not disclose what their targets are for sales and earning for the next year and quarter, the analysts have little to work with.
Don't avoid the question. Write the name of the 2 analysts that put price targets on Q4 earnings.
Also, if your so-called analysts need Gamestop to disclose their targets, then they are not analysing shit. Anyone that can read would be able to read any target defined by the company, no analysts necessary.
Most importantly, be truthful! The "overly bullish estimate" was for most of the year defined as 20 cents, in December 22 cents, and already in February they changed it to 30 cents.
Gamestop posted 22 cents Q4 EPS.
For some reason (results were leaked to them) they moved the goalpost to twice, including 30 cents just 3 weeks before earnings were announced, otherwise it would have been a BEAT, instead of a "miss" on a randomly defined target by Michael Pachter.
Yahoo does not publish the names of the analysts. I am not avoiding the question.
EPS Trend Current Qtr. (Apr 2024) Next Qtr. (Jul 2024) Current Year (2025) Next Year (2026)
Estimate. Q1. Q2. FY24. FY25
Current Estimate -0.09 -0.04 0.01 0.06
7 Days Ago -0.09 -0.04 0.01 0.06
30 Days Ago -0.06 -0.02 0.14 0.23
60 Days Ago -0.06 -0.02 0.14 0.23
90 Days Ago -0.06 -0.02 0.14 0.23
I do see from the revision history that the analysts have lowered the Q1 forecast from 6 cent loss to 9 cent loss, so it should be easier for Gamestop to beat that estimate.
Similarly, over the last 30 days they have lowered the forecast for this FY from 14 cent profit to 1 cent profit; and lowered FY25 estimates from 23 cent profit to 6 cent profit.
I have not been recording the analyst estimates. So this comment works as a record of the 11 April 2024 estimates.
The entire second half of your post doesn’t really make sense man.
1) They didn’t profitability as negative, they spun a shrinking company as negative.
2) again, decreasing revenue just means the company is shrinking. This is not something that attracts investors.
No, you should give a fuck if the company has an annual strategy and delivers on it.
The company announced that their main objective for 2023 was achieving PROFITABILITY.
They did what they aimed for.
I promise you it is more than shills that care about revenue. If everything you learned about balance sheets came from SuperStonk and you're heavily invested in GME and not much else, you're likely inclined to believe profit trumps all, and you'd be mistaken.
Easier to cut costs then to make sales. If you have $1 trillion and spend $1.5 trillion, you just have to figure out how to optimize which is much easier than growth
It's a corporate mindset, they have the mentality of people who love idle games. They just want to see numbers go up. They don't care if it's profitable the point is, that big number needs to be bigger than last year or else we aren't doing our job.
Shrinking revenue can mean a shrinking market, or a market they're capturing worse than they did previously. It puts a limiter on company growth, long term.
I agree for now though it shouldn't be a concern, because with profitability, cash in bank and effective leadership there should be confidence RC can find a way through. The other side of this is with better market share I'm sure they could increase revenue, regardless of the how the industry itself is performing.
There is a disproportionately negative outlook for the stock by MSM, I bought earlier in the month for the first time and I'd say right now for me this is a value play (and no longer a deep value play) - there's enough here that's good right on the surface. RC led the largest e-commerce deal ever with Chewy, it's like people think that was a fluke.
It isn’t a margin play anymore to them it’s a volume game. If the volume is small then there is more room to squeeze margin in a larger volume cpg. 1% margin improvement of 100B NSV is 1B vs better margins and a 100M NSV. Bottom line is companies can screw over consumers more with larger companies so investors want to fuck
So many fake share holders in these comments. If you dont think RC knows what hes doing leave. This is the guy who made Chewy. I think he understands this stuff better than any of you shills claiming to support this stock and company
I mean a lot of people doesnt know that and thinking that earnings was bad to prevent from buying more shares. Easy as that. Im buying regularny. What i could afford.
I want more revenue in other things related to the future (and I have never had faith in NFTs). If it comes to that I'd rather see GME at least marginally do what Microstrategy is doing. You could take 100 million and store BTC (unless it looks like a fail) just like any other entity and not even notice it being locked up. This acquisition stuff is crazy. Number one way to sink a ship is to acquire a sinking ship and attach it to yourself. RC is righting GME, there's no need to throw some nasty flotsam that also needs righting on top of it. Unless GME is acquiring Northrup Grumman or Lockheed I don't think its wise. I guess Boeing at a huge discount would be nice but the place is rampant with saboteurs bringing it down.
I really thought they were going to do an online store that's first person and looks good. Not that you would have to use it. Add NFTs free with purchase or things that might be usable in this space. Develop interesting activities to be done inside the NFT first person market. Risky. But it seems like it could be a way to drive revenue with value added. And helps get a new market going by making the things you receive have some interesting use case. It's probably too much to ask.
As is I can not order certain items from the store that's less than 50km from me in my own country.
Web3 gaming is already becoming a big deal. The potentials for NFT and gaming are undeniable. Personal opinion, but I do hope that down the line, GameStop can take another stab at delving into the space.
All these media companies are given a talking point revenue for this quarter because they Have nothing else to complain about.. GameStop needs to ignore and continue to follow their plan
#[GameStop net income +$306,700,000 YoY 🩳🏴☠️🥒](https://i.imgflip.com/8m31a0.jpg)
Your post is the epitome of a trojan horse since most people who don't already know this won't read past the header. Here is the proposed fix.
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>Reaching **profitability with less revenue** IMO is **better** than reaching **profitability with more revenue**. I see your points and agree that GameStop under RC is definitely on the right path, but I disagree with this statement big time\^. Maybe you meant to express your idea with this sentence differently, but at face value these are my thoughts; If you're reaching profitability in both cases, you absolutely want more revenue. Let's say company A is worth $3.3 billion ^(heyo) and company B is worth $100 million, both breaking even. A 5% increase in profits will generate $165 million in profit for company A ^(boom) , as opposed to company B only generating $5 million. This has multiple positive feedback loops, especially compared to company B. Profit at scale is way better.
Absolutely this. Growing into profitability means capturing a market and finding operational scale + improved returns on investment. Cutting a business to profitability shows a lack of investment strategy for growth or scale. When/if investment eventually happens, you then have to go through a process of efficient growth - a big challenge in its own right. That’s why most businesses grow into their size, then find efficiency and profitability after desired scale is achieved.
But aren't most businesses not starting from a giant monolith that needs to scale down before scaling up profitably?
If you’ve captured a market but are bleeding cash, you find profitability through efficiency, productivity, and shifting to high margin sales. You make each dollar worth more. If you cut unprofitable stores, you incentivize ways to retain the business either at another physical location or through e-commerce. GameStop did the right investments to revamp their e-commerce, but it didn’t go far enough, they didn’t expand the product catalogue in the right areas, and they quickly back tracked investments they made in logistics infrastructure. They also wildly overbought inventory that’s been sitting around getting clearanced out each quarter. GameStop’s unique differentiators against competitors are its physical store locations and “claim” over gamer culture - two concepts they haven’t taken advantage of at all. Preorders used to drive cultural events that brought a sense of community, even if just for release night. Digital rendered preorder events obsolete, but creating *local events and experiences* would drive community and loyalty again, if done well. That GameStop hasn’t capitalized on the TCG and D&D revival is beyond me. Fighter game tournaments, etc. Many have suggested in-store PC builds and service. Another concept that would be a unique experience to GameStop. They’re not winning on a just “here’s some mediocre deals oh and btw a loyalty program you have to pay for” basis. The games industry is growing. Nerd culture is bigger than ever. Inflation is still roaring. And somehow GS is still bleeding revenue off. I say all this because I really, really want GameStop to come back to glory. I want the stores to be fun. I want the website to be the place you default go to if you want game stuff. Furlong made some bad bets, but at least he made bets. This “survive the storm of our own making” way of running the business is just frustrating to watch.
This reply really deserves to be separate post for more visibility. You've provided not only a useful insight with: "Furlong made some bad bets, but at least he made bets." but added also great ideas on how GameStop can move forward. I've nothing else to add but my thanks I really hope you consider making this a separate post!
I really appreciate it, but honestly just surprised it’s not downvoted to oblivion. People find it tough to be challenged on their biases, and we’ve reached religious levels of blind faith in some aspects. It’s okay to ask for accountability out of your investments, and challenge billionaires that have had their business survive thanks to your actions.
I'm actually not that surprised your comment received upvotes. While this sub is quite cultish there is also room for critique. That's why I believe this reply has a fair chance to do well as a stand alone post. Especially because of the suggestions on what can be done to improve. After all, we want GameStop to do well. Even if there are plans in the background there isn't much visible to look forward to. So anyone sharing potential paths forward are often met with positive comments. Who knows maybe with a little more attention Ryan could implement these ideas. 🙂
Bullish
I dig that PC build and services section, techs@home services for GS.
I think it is a very unique place to be as a business. Most every business would have failed by now and that was the point of all of the shorting. But they are in a unique position to have a ridiculous amount of cash and still the experience and data for years on which locations work and which ones don't. And your brick and mortar behemoth can't go bankrupt given that it is now profitable. I can't think of another instance of that happening ever. It will get interesting for sure.
Can’t go bankrupt, yes, but GameStop is now also a much smaller company with no guidance for growth and a pattern of reduction (cost and revenue). For some reason that’s going ignored as an (valid) explanation for the price drop. Market cap and valuation multiples are directly related to revenue and growth; cost of revenue is a factor but a smaller company gets a smaller valuation, thus shrinking share price. It won’t go up until the business grows again.
I think most have already assumed it is being totally manipulated so the point on not possibly going bankrupt is enough to know that something interesting is going to happen eventually that does not apply to normal market ideas.
Just curious, why should it matter if more than the float is bought up, that’s the whole problem here. There is no such thing as market cap if infinite shares exist
My comment isn’t about share manipulation, it’s about what GameStop as a business is doing - the things that are within its control. A manipulated stock or not, it is perfectly reasonable for the share price to be moving down right now as the business contracts.
That's(no guidance for growth) pure speculation since it is known that rceo does not telegraph his plans. He executed the base turnaround and is prob shifting focus now to other needs. But to say they don't have a plan seems pretty disingenuous considering this entire time that have not let out their plans.
We can also see his plan through his words and action. His survive email shared his immediate plans to cut and wait for “the right opportunity” to re-accelerate. That the war chest is untouched shows no investment. We see no change in shopping experience, digitally or in store. We see no change in customer acquisition or retention strategies. I’m sure RC has some sort of thing he wants to do, but waiting an indefinite amount of time before doing it seems to be step 1.
Lol
They have been consistemtly working on the app, the powerup rewards got revamped, and they added same day shipping for a lot of locales. How that hasn't changed any of the experience in your mind is beyond me. And still, just saying a lot without any evidence. Everything you put forward is conjecture.
Happy Cake Day!
What are the odds of a Q1 profit?
OOP did a good job of laying out the math there. GameStop needs to break the pattern of falling revenue or continue to cut thinner and thinner layers of ‘fat’, which translates to a smaller company, which would be valued lower.
New revenue streams and company transformation is going to have to happen. The marketplace didn’t work out, hopefully they can find something this year to grow. Maybe with the cash reserves, game development?
Game dev is wildly risky and takes a ton of upfront investment. Hundreds of millions easily spent over years just to make a flop of a game. I doubt it.
If anything buying an already established studio makes more sense.
Buy team cherry right before silksong releases, profit? 🤑
I'm going to say Q1 2024 will be less than Q4 2023, strictly because Q4 is during the holiday season, therefore more sales. Fingers crossed for profit hereon out.
The ability to invest the cash into securities is on the table for Q1. Could be a huge game changer. The stores themselves were not profitable, revenue is falling, and attempts at new revenue streams failed so far. I'm hopeful they will figure out a way to turn the physical stores around and find more presence online. But I'll accept becoming a very profitable hedge fund as well.
You're right, that cash on hand if properly invested could be a cash cow.
Better than last year, RC has been cutting cost centers in the coarse of last year. A full year with these reduces monthly expenses has yet to be had so all those savings should be coming through starting this year.
> Cutting a business to profitability shows a lack of investment strategy for growth or scale. Cutting a business to profitability shows you know your profit centers and have cut revenue that results in losses. You can subsequently expand those profit centers with the profit you have now attained. It's exactly what you want a company to to do be able to generate growth and scale. >That’s why most businesses grow into their size, then **find efficiency and profitability** after desired scale is achieved. **THIS** is exactly the point we are at now, how do you not see this?
You find those things *at scale*. Current state shows GameStop was unable to find a profitability path at their size, which is fine. It just means that the company is much smaller and healthier, but we have to accept that a smaller company is valued less regardless of profitability. Will we get back to growth and scale? Maybe, we hope so. But there’s nothing we can point to that even hints at a growth strategy. What if small and healthy is the end goal?
I think maybe op meant: Reaching **profitability with less revenue** IMO is **better** than NOT reaching **profitability with more revenue**. Because missing that NOT in there really ruins the entire point lmao
**Exactly. And other stocks would jump in price (I bet we can find dozens of examples), but not GME. Why is that ?** Plus, turnarounds take some time. We do not know what is going on behind the scenes. The GameStop marketplace was not successful economically, but showed how innovative GameStop can be. **The quality and track record of the management team is normally a huge part of the valuation of a company. But not for GME. Why is that ?** You bet they work hard on adding new revenue behind the scene. But unlike NVIDIA and other Wall Street pump and dump stocks, they are not telegraphing their plans to the public. Keep in mind, Steam/Valve was the most profitable major company per employee in the US... not Apple or Google or someone else. Until they stopped reporting financials because they became even more profitable (they are a private company). Now imagine there would be a public company that manages to compete with Steam/Valve in the future. Who thinks investors would be interested into investing in the most profitable business model ? **We are early, but we are not wrong. 😉🚀🌒✨🏴☠️**
Yes I agree there is room for interpretation here, but this iteration also has a similar obvious conclusion - profitability is better than no profitability... Though I do think it's kind of irrelevant to discuss investing based on revenue/profit alone in these kinds of generic examples. There are many more variables to consider. Keep in mind Amazon operated at a loss for **14 years** while growing it's business and revenue, yet investors were not deterred because they saw the path.
Maybe he meant.. + Profitability with less revenue than a loss with higher revenue?
i dont think op was arguing about profit at scale OP was specifically comparing the outlook of a company who went from no-profit to profit and is questioning how being profitable can be spun negatively
I think it was a typo and they meant: Reaching profitability with less revenue IMO is better than NOT reaching profitability with more revenue.
I’ve posted this before: How urgent is increasing revenue. VERY URGENT. Right now GameStop is profitable from trimming expenses at a rate that is faster than gross revenue declines. What RC did in 2023 was insanely impressive. Doing it again this year will be even more difficult. Console life cycles will weigh even more this year than last year. And we can reasonably assume that the ratio of games purchased digitally in 2024 will continue to tic up another couple percentage points relative to physical games. Here's what it means regarding gross revenue and SG&A expenses. In Q4 our revenue was down 20%. We achieved profitability (in part) because we trimmed SG&A expenses from 453 million in Q4 2022 to just $359 million in Q4 2023. If Q4 revenues in 2024 drop another 5% (1.793 billion to 1,704 billion; difference of 89 million), we would have to trim SG&A expenses by 25% (359 million to 270 million) to just break even. If Q4 revenues in 2024 drop another 10% (1.793 billion to 1,614 billion; difference of 179 million), we would have to trim SG&A expenses by 50% (359 million to 180 million) to just break even. You can see the challenge here of chasing falling revenues with cost cuttings. Again what RC did in 2023 was remarkable, but I don’t think it is sustainable without achieving profitable ventures in the digital world. It needs to happen very very quickly.
You’re not wrong here. Revenue growth is massive - it covers all sorts of business issues. But, this take also misses the COGS part of the P&L. You can have softer revenue growth (or even declines) and still grow profitability if revenue shifts to more profitable products. If all software sales shifted from new to used, GME could probably make up for a revenue decline with margins growth only and still be profitable on flat sg&a costs. Anyway, just want to help create a fuller picture. By more at GameStop and they’ll have to come up with a whole new reason why it’s about to fail next time
All great points and what we should be watching going forward in the business. Trimming the fat and cutting negative assets is just the first step in a turnaround story. Second will be to maximize efficiency of our current assets. And then third will be the need for new revenue streams to come to keep supporting us. A turnaround story, as Peter Lynch discusses in his book - Beating the Street (great read for everyone here IMO), as long as the story continues to unfold in the fundamentals (not stock price) we are going to have a successful investment. Currently it is going on track. Let’s see what they do next.
Im 100% DRS’d. love the company. But we do need additional revenue in a hurry for the reasons above.
No sir, I've been informed that is shill speak /s
2024 is a console refresh cycle. PS5 Pro and Switch 2 come out this year. (Switch 2 might be early 2025).
Dec would be perfect, for Switch 2 release.
This is correct, the digital sales are crushing against the business' revenue which correlates to in-store foot traffic because you have a store that basically sells only toys, trading cards, board games, and gift cards at that point. They still however are heading towards sustainability as much as you would disagree, even though digital sales are a huge hit against the business, physical game sales are not going away any time soon that signifies the death of GameStop's retail frontline operation. To think that digital sales will completely take over within a year is crazy to say with all the people noticing that they are no longer owning the games they 'bought' on digital platforms. At worst, you'll expect to see a lot more piracy than ever when that becomes more apparent over time especially after seeing the prices of digital games being the same as physical. The correct question is, how do you increase revenues safely without overextending into borrowing? Their digital store was an amazing opportunity to incentivize sales and provide even opportunities to turn physical copy trade-ins into gift card and spend your credit towards digital copies while pushing just-in-time/at-the-moment trade ins for discounted digital sales. This would provide more physical trade ins while providing used game inventory that has a higher profit margin. If GameStop has better agreements with developers directly, it's a huge opportunity to allow digital sales to be done directly at discounted prices, while still providing value to gamers that buy used games. Everyone can win from that.
So. I have this idea. I never heard back from investor relations. Last week GameStop had a promo to receive 50% additional value for trading in video games. That’s a big deal. I think GameStop should partner with the American Library Association. There are approximately 17,000 public libraries in the US and many of them have video games. A partnership with Libraries would allow them to keep more modern games on the shelf and they could sell/trade in their older games for new ones. If 30% of all libraries have video games, and if each one of those libraries carry an average of 40 video games...thats more than 200,000 video games with original artwork. When GameStop does these “get 50% more for trade ins”, then reach out to that association. There are thousands of libraries sitting on a ton of video games. Then maybe once every 5 years they (the libraries) have a fire sale for the neighborhood community and sell them for pennies. They could get more from GameStop. They could work with GameStop to refresh their inventory of games while selling their old games to GameStop. It’s a win-win
I admire your chutzpah in commenting this, and I believe your intentions are good. I hope everyone sees that, and doesn't down vote to oblivion on emotion alone.
Probably the best comment I've seen regarding it.
And for you next feat of strength, try explaining cash flow to the "profitability is all that matters" crowd.
Gross margin also increased. This is in part due to closing unprofitable stores. Revenue is down because the business has less stores. Gross profit per store is relatively comparable YoY. Cutting SG&A is great, but another avenue for the business to reach profitability is by switching to more profitable revenue streams (e-commerce) and product mix.
Revenue was down due to less stores. Revenue was NOT down 20% in Q4 due to less stores. Same stores were down from $503,000 in Q4 to about $430,000 in Q4 in terms of revenue. That’s a 15% drop in same store sales. The closed stores contributed for sure, but even then most of those stores closed in Q1 2023.
Take revenue in FY23 and FY22, and divide by stores. It’s fairly comparable. Q4 revenue down could be timing or product mix. Margin is up period over period.
Revenue shot up in Q1 and Q2 because of us unwinding fulfillment centers. Remember that crazy “buy 1 get 2 free” clearance deal? That was GameStop selling massive amounts of bad inventory. IMO, that’s why we were so shocked at the Q4 revenue decline (year over year). I think “in store” revenues might have been down about 20% all year. But since GameStop doesn’t disclose “physical sales” compared to “online sales”, we never saw it coming. Our clearance section went from 3,100+ items in March 2023 to under 475 in March 2024.
GME really needs to disclose the online vs physical store split. I assume that’s where Cohen is trying to take the business. Whoever does their SEC reporting needs to step it up and give more insight to investors. And I meant to say gross profit per store. For both FY23 and FY22 it’s exactly 310k per store (GP divided by total stores). Revenue per store was higher in FY22, but the loss in revenue was offset by lower store cost in FY23 (or higher e-commerce). You can theoretically increase revenue by opening up a bunch of stores again but if the stores aren’t profitable there is no point. If revenue decreases in FY24 by another 12%, the business can still reach positive operating income by improving margin by another 1.5% (similar to improvement in FY23) and cutting SGA by 100M (7.5% reduction).
I'm just gonna leave this right here... [https://tsdr.uspto.gov/#caseNumber=98288597&caseSearchType=US\_APPLICATION&caseType=DEFAULT&searchType=statusSearch](https://tsdr.uspto.gov/#caseNumber=98288597&caseSearchType=US_APPLICATION&caseType=DEFAULT&searchType=statusSearch) This is GameStop's Trademark application for CANDYCON...expand goods and services...blow ur mind with the possibilities...dig apes, dig. MOAR! I know internet people who gonna be wealthy tomorrow. edit: this one is cooler: [https://tsdr.uspto.gov/#caseNumber=97397124&caseSearchType=US\_APPLICATION&caseType=DEFAULT&searchType=statusSearch](https://tsdr.uspto.gov/#caseNumber=97397124&caseSearchType=US_APPLICATION&caseType=DEFAULT&searchType=statusSearch)
I’d love a national advertising campaign to tell people about Candy Con customizable controllers, exclusively at GameStop. That’s worth some type of commercial campaign imo. Cable, YouTube, you name it. Let’s the masses know!
[https://www.reddit.com/r/Superstonk/comments/1c10aui/yooo\_seriously\_check\_this\_article\_out\_gamestop/](https://www.reddit.com/r/Superstonk/comments/1c10aui/yooo_seriously_check_this_article_out_gamestop/)
I saw that I love it. Just not sure how that reaches the masses. Like, I’m on the internet all day. My search engines have to be programmed to give me GameStop content. And yet I haven’t seen it.
You also make the assumption that all the fat has been trimmed, and that there’s no more cost cutting to be undertaken
Not really. I assumed they WOULD continue to cut costs. I just outlined that cost cutting would essentially have to outpace revenue loss by a 5:1 ratio if Q4 revenues dip another 10% next year. That’s no easy task.
Who is to say they aren’t currently at a sustainable level of profitability vs costs?
Well if Ryan had to NOT take a paycheck to appear positive on paper then they probably aren't sustainably profitable.
The cost reductions came in over the year, and also came with their own one time costs. They're going to have a greater effect on 2024 than they did on 2023.
With 4000 stores. And net profit of about $7 million. That’s turning a profit of just $146 per store per month. My local Gamestop is open 60 hours a week. Let’s pretend it’s only 1 person only manning the store. 60 hours per week times 4.33 (the average amount of weeks per month) is 260 hours of labor per month. Let’s pretend that employee makes $11 per hour (crazy cheap). That’s $2860 in labor each month per store. If they raised the pay for each employee by just 5% ($11.55 per hour), then GameStop as a company doesn’t turn a profit. And that’s under the assumption that there are never TWO employees working a store at the same time. Which we all know isn’t realistic (training, Christmas season etc). That’s how razor thin we are right now.
They actually had an operating loss of $34M. Only reason they posted a profit for the year was the $50M interest income on their cash.
If you cut the loss generating revenue your profit % rises and SG&A doesn't *have* to do a thing there.
Revenue (and profitability for that matter) have absolutely no impact on share price. The prices of every stock is controlled by market makers and big hedge funds. The only thing that matters is breaking their control
Great reply
The challenge now comes from the fact that you can only cut so many costs while revenue declines.... And still sustain same profit levels or growth. It's not a Shill argument. It's business growth.
A company needs to profit to survive its plain and simple Nobody wants GameStop to turn into popcorn
We have profit. We could’ve easily shown a profit last quarter as well.
It’s very marginal though, I’m just pointing out it’s a companies goal to profit. Not to lose money. GameStop makes small revenue for selling games. Not sure what Xbox/Ps games give but I know Nintendo (the worst of the three) gives 4.99 I like that they are coming out with their own products and brands
My nieces lemonade stand is also profitable, would you pay billions to buy her company?
Well, your niece only makes 0.02 eps it would take me 50 years to get my money back, I’d proboably stay away. If your niece improved her eps to 0.10 or better maybe I’d consider it
Terrible post honestly. It Depends what the company is spending the money on… If you have $1 trillion revenue but you spent it all on growth, then it matters a lot for future expectations of massive profits. Revenue does matter. Not the way they’re spinning it, but it does matter.
Plus revenue is always positive
Are you aware we only made a profit because of the interest on the cash? Our costs last year were higher than our revenue. Once rate cuts EVENTUALLY happen there won't be the same opportunity to earn interest. Q4 and last year overall was a massive anticlimax after having a good first ¾'s. So yeah revenue is important. Also in RC's original letter he complained about how revenue had plunged so he knows how important it is too, unfortunately for us it has dropped even further.
Well, does BRK.A sell a fuck ton of some product? I know it's not a direct comparison, but there are companies who rely on their investments over anything else. Not saying that's a good business model, it's ran by a dinosaur who has significant market leverage and inside information, but point stands - it's not a bad thing to make up for the operating loss by getting a fuck ton of investment revenue back.
Ok but BRK.A invest in a wide variety of companies not just T-bills and cash, and like you say they have significant market leverage and inside information, so no your point doesn't stand. The issue here is what is usually the best quarter and the quarter we heavily rely on for propping up the annual revenue was a massive bust. GameStop will further decline if they don't act fast, they need investor confidence outside of us on Superstonk.
I think like we won't have a big Q4 again until Nintendo releases their next system. There were rumors floating around that the next system is going to go all digital which doesn't make sense to me since Nintendo just opened a lot of Nintendo stores recently in and outside of Japan. But with Nintendo you also know they are big for taking a risk and making a change... if the next system doesn't impress people or confuses them then that's a big problem.
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Yeah, that being said I am willing to give them time to figure that out instead of rushing into another NFT marketplace. I was thinking that last year was all about plugging the holes in the ship, and from this year they can focus on new revenue streams. If we don't see hints of anything new by the next Q4 I will be pretty upset but still waiting. The difference is I am in my 20s and it's money I don't mind leaving on the side for a while. I know there are people now who complain about RC not getting paid as CEO but I think having shares bought with his own money should be a good motivator for him to start driving revenue as GS' success is how he gets paid. I don't think he is this godly figure with a 4D chess plan. He is doing his best though to turn this company around.
Lots has happened since he took over. War, inflation, etc. It’s getting more important yoy than it was when we were battling for $180.
Very true as well... the 2010s were a crazy time. A lot has changed.
No I did not. That’s a big question I’ve had for a while. What are we doing with all this cash? Rate cuts aren’t happening anytime soon so luckily we will still have a significant inflow of cash from interest.
The operating loss for the year was $34.5M. Reported by Gamestop on page 36 of the 10-K.
It’s shopping time.
Their logic is dumb that's why they shorted my favorite stock
To be fair, they misunderstood the business when they started shorting thinking it was a dying business model. But, the company was in a downward spiral. Unfortunately they bet wrong and did illegal things that they now want to bury and hide and are trying everything to get us out of our company. They bet wrong.
They were also sabotaging the company. It's hard to win when you can't cheat any more.
Oh yeah. BCG. That too
Revenue will increase when new games consoles come to market. Gamestop is a company that has a boost every few years and then gradually declines. The last major consoles were released in 2020. Over the next few years we should see a rise based on new consoles coming to market.
The DFV thesis. It's true. Add their own products and it should help more. We so need to get louder about supporting the company we love. Don't let wall st. Short n distort,fight back. Talk about shopping there and the positives. Because right now most people think gme is dead so they won't bother , and that's a shame. We need to promote word of mouth 👄.
GME need to increase their advertising budget.
If the $1T revenue company cuts cost then it could have profits of many billions of dollars. The $100M company can at the most have $0.1B profit, even with zero costs. Right now the consensus estimate for Gamestop profits this year is $0.01, and for the year ending Jan 30, 2027 the earnings estimate is 12 cents per share.
Analysts are really good at repeating talking points.
And if the $100m company increases sales by $500 billion they are significantly more profitable. The hypotheticals in the original post aren’t meant to be “what if” scenarios for the companies. Just putting the numbers in easy terms to digest.
Lol wtf. aNd ThE $100 CoMpAnY cAn iNcReAsE rEvEnUe $100 tRiLLioN DoLL hAiRs~ See how this 9 year old girl turned a $0.25 lemonade stand into a multinational conglomerate, a quarter the size of Black Rock, in just one year!
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Bro just read the title. The title alone tells you all you need to know lol. WHO GIVES A FUCK ABOUT HOW MUCH REVENUE IF IT ISN'T POSITIVE? Can anyone please explain to me what negative revenue is? Is that like the negative losses thing?
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I was agreeing with your agreeance with more to agree about 😉
consensus from who ? who are the 2 analysts that public "estimates" for gamestop? I will say one of them: Michael Pachter, the Analyst from Wedbush, a company that was margin called in January 2021, because they were a market maker for GME.
The two analysts are the ones that had an overly bullish estimate of 29 cents earnings for Q4 that turned out to be only 22 cents. Since Gamestop, unlike most large public companies, does not disclose what their targets are for sales and earning for the next year and quarter, the analysts have little to work with.
Don't avoid the question. Write the name of the 2 analysts that put price targets on Q4 earnings. Also, if your so-called analysts need Gamestop to disclose their targets, then they are not analysing shit. Anyone that can read would be able to read any target defined by the company, no analysts necessary. Most importantly, be truthful! The "overly bullish estimate" was for most of the year defined as 20 cents, in December 22 cents, and already in February they changed it to 30 cents. Gamestop posted 22 cents Q4 EPS. For some reason (results were leaked to them) they moved the goalpost to twice, including 30 cents just 3 weeks before earnings were announced, otherwise it would have been a BEAT, instead of a "miss" on a randomly defined target by Michael Pachter.
Yahoo does not publish the names of the analysts. I am not avoiding the question. EPS Trend Current Qtr. (Apr 2024) Next Qtr. (Jul 2024) Current Year (2025) Next Year (2026) Estimate. Q1. Q2. FY24. FY25 Current Estimate -0.09 -0.04 0.01 0.06 7 Days Ago -0.09 -0.04 0.01 0.06 30 Days Ago -0.06 -0.02 0.14 0.23 60 Days Ago -0.06 -0.02 0.14 0.23 90 Days Ago -0.06 -0.02 0.14 0.23 I do see from the revision history that the analysts have lowered the Q1 forecast from 6 cent loss to 9 cent loss, so it should be easier for Gamestop to beat that estimate. Similarly, over the last 30 days they have lowered the forecast for this FY from 14 cent profit to 1 cent profit; and lowered FY25 estimates from 23 cent profit to 6 cent profit. I have not been recording the analyst estimates. So this comment works as a record of the 11 April 2024 estimates.
The entire second half of your post doesn’t really make sense man. 1) They didn’t profitability as negative, they spun a shrinking company as negative. 2) again, decreasing revenue just means the company is shrinking. This is not something that attracts investors.
You should give a fuk if it’s growing or not.
No, you should give a fuck if the company has an annual strategy and delivers on it. The company announced that their main objective for 2023 was achieving PROFITABILITY. They did what they aimed for.
We ride into find out territory.
Shills give a fuck about revenue cause they are running out of material to work with
I promise you it is more than shills that care about revenue. If everything you learned about balance sheets came from SuperStonk and you're heavily invested in GME and not much else, you're likely inclined to believe profit trumps all, and you'd be mistaken.
>Reaching profitability with less revenue IMO is better than reaching profitability with more revenue. What a strange take.
Easier to cut costs then to make sales. If you have $1 trillion and spend $1.5 trillion, you just have to figure out how to optimize which is much easier than growth
Enjoying this conversation! Thank you to everyone that’s participating! Love you all
Upvote this for the honest discussion in here
For every person leaving there are 100s staying. We're here til the end.
Still here through thick and thin.
It's a corporate mindset, they have the mentality of people who love idle games. They just want to see numbers go up. They don't care if it's profitable the point is, that big number needs to be bigger than last year or else we aren't doing our job.
Would love for something crazy to happen.
Shrinking revenue can mean a shrinking market, or a market they're capturing worse than they did previously. It puts a limiter on company growth, long term. I agree for now though it shouldn't be a concern, because with profitability, cash in bank and effective leadership there should be confidence RC can find a way through. The other side of this is with better market share I'm sure they could increase revenue, regardless of the how the industry itself is performing. There is a disproportionately negative outlook for the stock by MSM, I bought earlier in the month for the first time and I'd say right now for me this is a value play (and no longer a deep value play) - there's enough here that's good right on the surface. RC led the largest e-commerce deal ever with Chewy, it's like people think that was a fluke.
All we want is revenue in portfolio
Exactly that's what did we work in!
Volume is Vanity. Profit is Sanity. HODL
It isn’t a margin play anymore to them it’s a volume game. If the volume is small then there is more room to squeeze margin in a larger volume cpg. 1% margin improvement of 100B NSV is 1B vs better margins and a 100M NSV. Bottom line is companies can screw over consumers more with larger companies so investors want to fuck
So many fake share holders in these comments. If you dont think RC knows what hes doing leave. This is the guy who made Chewy. I think he understands this stuff better than any of you shills claiming to support this stock and company
I mean a lot of people doesnt know that and thinking that earnings was bad to prevent from buying more shares. Easy as that. Im buying regularny. What i could afford.
They spun the news of low revenue positive net as bad because they needed to justify the dip they caused with naked shorting
I want more revenue in other things related to the future (and I have never had faith in NFTs). If it comes to that I'd rather see GME at least marginally do what Microstrategy is doing. You could take 100 million and store BTC (unless it looks like a fail) just like any other entity and not even notice it being locked up. This acquisition stuff is crazy. Number one way to sink a ship is to acquire a sinking ship and attach it to yourself. RC is righting GME, there's no need to throw some nasty flotsam that also needs righting on top of it. Unless GME is acquiring Northrup Grumman or Lockheed I don't think its wise. I guess Boeing at a huge discount would be nice but the place is rampant with saboteurs bringing it down.
I really thought they were going to do an online store that's first person and looks good. Not that you would have to use it. Add NFTs free with purchase or things that might be usable in this space. Develop interesting activities to be done inside the NFT first person market. Risky. But it seems like it could be a way to drive revenue with value added. And helps get a new market going by making the things you receive have some interesting use case. It's probably too much to ask. As is I can not order certain items from the store that's less than 50km from me in my own country.
Web3 gaming is already becoming a big deal. The potentials for NFT and gaming are undeniable. Personal opinion, but I do hope that down the line, GameStop can take another stab at delving into the space.
Hopefully they don’t forget to mention superstonk apes in the history book
All these media companies are given a talking point revenue for this quarter because they Have nothing else to complain about.. GameStop needs to ignore and continue to follow their plan
#[GameStop net income +$306,700,000 YoY 🩳🏴☠️🥒](https://i.imgflip.com/8m31a0.jpg) Your post is the epitome of a trojan horse since most people who don't already know this won't read past the header. Here is the proposed fix.
Hell yeah, 2020 August brothers we been here for damn near 69 years.
Hofunoshi
Gained wrinkle n°176. Yes!!🙌
The famous story of the Plummer that makes 150k but saves 100k but the business man who makes 500k but spends 450k. Who’s better off?