And GameStop has reduced its overall debt on its balance sheet by almost $600 million since early 2019. Online sales, which accounted for about 30% of overall company sales, soared by more than threefold. 2 but it was able to offset store closures with strong game console demand. The company posted total sales down 3.1% for the nine-week period ended Jan. There have been some recent bright spots for GameStop. retail investor favourite GameStop Corp, making the video game retailer the most traded stock on some Indian brokerages after anonymous social media posts fuelled a frenzied rally. India's small investors are snapping up shares of U.S. That's up from Newzoo's forecast issued during the start of the pandemic last year of $200.8 billion. The global gaming industry was expected to hit $174.9 billion last year and reach $217.9 billion by 2023, according to analytics firm Newzoo. Meanwhile, the overall video game market has been exploding, a trend accelerated by the pandemic as Americans stay home. Discounters like Walmart, Best Buy and Target have also ramped up their offerings. And Amazon is testing the cloud gaming arena with a new streaming service called Luna. Xbox Live, PlayStation Network, Nintendo eShop, and online game platform Steam all let gamers download games. "It's easier for me to download the games in the house and not go anywhere," said Cruz, noting that 90% of his games are digital. Now he goes to GameStop every two months, specifically to get certain exclusives. But that stopped a few years ago when he started to download games. Piles of games for the Xbox 360 - the Microsoft gaming console that went out of production about six years ago - could be had for a quarter instead of the $50 they once commanded.Ĭarlos Cruz, 33, of New York City, used to visit GameStop once a week to buy new games and trade in old ones. Most of the games went quickly at a deep discount. Inside, the shelves were for sale along with a scant mishmash of power cords, anime key chains and picked-over T-shirts. What's going on with GameStop's stock doesn't make sense to a lot of people.Īt one GameStop location in Brooklyn, there were bright liquidation notices papered across the front windows. Annual sales have gone from its peak of $9.5 billion in fiscal 2012 to an expected $5.15 billion for the year ended Jan. Sales declined over the past decade with the rapid shift toward downloading games. But it also became the place to trade in old games and consoles to get cash or credit to buy new ones. It was the destination to grab the latest video games just as they were released. The Grapevine, Texas-based company was founded in 1984 as Babbage's and took over the GameStop name in 2000. "Ultimately, the reality is going to set in, and ultimately, the fundamentals are going to have to come to play. But ultimately you can't escape gravity," said Scott Rostan, CEO of Training The Street, which teaches financial modeling and valuation to college students and MBAs. While GameStop's new board member Ryan Cohen, the founder of online pet store Chewy, has raised hopes of a turnaround, it's still going to be an uphill battle. Some analysts believe a reasonable valuation could settle in around $20 to $30 per share at best. 18, the number dropped 20.3% compared to a year ago.Īnalysts polled by FactSet have a "sell" rating on the stock and a price target of $13.44 per share. Customer traffic declines accelerated in January, according to new research from analysis firm Placer.ai. Robinhood and other retail brokerages took steps to tamp down the speculative frenzy surrounding companies such as GameStop, but the actions only sparked more volatility in the market and an outcry from users of the platforms and some members of Congress who say small investors are being treated unfairly.Īnd the attention-grabbing media coverage didn't bring shoppers back to the stores in recent weeks.
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