Group 1 - GameStop continues to close more stores, having closed 590 stores in fiscal 2024 and planning to close a significant number of additional stores in fiscal 2025, which ends in January 2026 [1][2][7] - The company has faced financial difficulties due to the rise of digital game downloads and increased competition from online retailers and big-box chains [3][4] - GameStop's revenue declined by $39.3 million year over year, indicating ongoing struggles in its business model [4] Group 2 - The majority of GameStop's stores are located in malls, which are experiencing declining foot traffic [4] - In early 2025, GameStop revised its investment policy to allow for investments in Bitcoin, aiming to provide sufficient liquidity and optimize investment returns [2][3] - The company's market capitalization currently stands at $9 billion, with a performance-based stock option for CEO Ryan Cohen contingent on reaching a market cap of $100 billion [7][9]

Core Insights - GameStop is continuing to close more stores, having closed 590 locations in fiscal 2024 and planning to close a significant number of additional stores in fiscal 2025, which ends in January 2026 [1][3] - The company has faced ongoing financial difficulties due to the rise of digital game downloads and increased competition from online retailers and big-box chains [6] - GameStop's revenue has declined, with a reported drop of $39.3 million year over year in its December earnings report [8] Store Closures - GameStop did not disclose the specific number of stores to be closed in fiscal 2025 or their locations, but recent social media posts have shown pictures of shuttered locations across various states [2] - The company has indicated that the closures are part of a broader strategy to adapt to changing market conditions and consumer behavior [1][3] Financial Strategy - In early 2025, GameStop revised its investment policy to allow for investments in Bitcoin, aiming to provide sufficient liquidity for day-to-day operations while optimizing investment returns [5] - The company has granted CEO Ryan Cohen a performance-based stock option award contingent on the market cap reaching $100 billion, while the current market cap stands at $9 billion [10] Market Context - GameStop has transitioned from a traditional brick-and-mortar retailer to a well-known meme stock, particularly following retail investor interest in early 2021 [9][12] - The company has lost over 34% of its stock value in the past 12 months, reflecting ongoing challenges in the retail and gaming sectors [12]

Core Viewpoint - GameStop, under the leadership of Ryan Cohen, has made significant strides in its turnaround but faces challenges in sustaining growth and achieving ambitious financial targets [1][9]. Compensation Package - Ryan Cohen's new compensation package is tied to substantial growth in GameStop's stock price and overall company performance, similar to Elon Musk's arrangement at Tesla [2][9]. - The package includes stock options for up to 171,537,237 shares, contingent on reaching specific market cap and EBITDA milestones [2][3]. Financial Milestones - The first milestone requires GameStop to achieve a market cap of $20 billion and cumulative EBITDA of $2 billion, necessitating more than a doubling of its current market cap of approximately $9.5 billion [3][5]. - To earn the full award, GameStop must increase its market cap to $100 billion and cumulative EBITDA to $10 billion, representing an almost 11-fold increase in stock price [5][7]. Current Financial Performance - GameStop generated $222 million in EBITDA over the past 12 months, indicating a need for substantial growth to meet the initial milestone [4][8]. - The company has transitioned from a money-losing entity to one that earned $422 million in the trailing 12 months, showcasing a significant turnaround [8]. Competitive Landscape - GameStop faces competition in its e-commerce and collectibles ventures, with its revenue from traditional in-store video game sales declining by 12% year-over-year to $3.8 billion [11]. - The company’s competitive advantage is limited primarily to its brand recognition, making its future growth path uncertain [11]. Investment Considerations - The incentive package places a heavy reliance on Ryan Cohen's leadership, making the stock a speculative investment with uncertain growth prospects [12][14]. - Investors may be cautious about purchasing GameStop stock due to the lack of a clear growth trajectory and the inherent risks associated with betting on a single executive's vision [13][14].

Core Viewpoint - GameStop Corporation is gaining market attention again, driven by its evolving business strategy and leadership changes, particularly under CEO Ryan Cohen [1] Group 1: Leadership and Compensation - GameStop has diversified its business beyond video games, with growth in collectibles and trading cards, positively impacting financial performance [2] - CEO Ryan Cohen, who holds a 9% stake in the company, has been pivotal in increasing interest in GameStop since his involvement began in August 2020 [3] - A new compensation plan for Cohen has been announced, which includes stock options that will vest based on achieving specific market capitalization and EBITDA milestones [4][5] - The compensation plan could potentially reward Cohen with stock options to purchase 171,537,327 shares at a price of $20.66, contingent on meeting defined performance targets [5][6] Group 2: Financial Performance - Since Cohen joined the Board, GameStop's market capitalization has surged from $1.3 billion to $9.3 billion, reflecting a 615% increase [6] - The company has transitioned from a net loss of $381.3 million in fiscal 2021 to a net income of $421.8 million over the last four fiscal quarters, indicating significant financial improvement [6] Group 3: Store Closures - GameStop is closing hundreds of stores as part of its turnaround strategy, with reports indicating 590 U.S. stores were closed in the last fiscal year [8] - An additional significant number of store closures is expected during the 2025 fiscal year, which ends on January 31, 2026 [8] - As of January 2026, 223 stores have been confirmed closed, with notifications sent to customers regarding the closures [9][10] Group 4: Stock Performance - GameStop's stock has seen a 4.7% increase to $21.63 recently, although it remains down 35.2% over the past year [11]

Core Viewpoint - GameStop has implemented a performance-based equity incentive plan for CEO Ryan Cohen, which is contingent on achieving significant growth in market capitalization and cumulative earnings [1][2]. Group 1: Incentive Structure - The plan grants Cohen stock options that will only vest if GameStop reaches a market capitalization of $100 billion and $10 billion in cumulative EBITDA [1]. - There is no partial credit; if the company does not meet at least $20 billion in market capitalization and $2 billion in cumulative EBITDA, none of the options will vest [2]. - The total award for Cohen could amount to stock options for 171,537,327 shares at a price of $20.66 per share if the targets are met [3]. Group 2: Company Performance - GameStop's shares fell by 36% last year, and the current market capitalization stands at $9.3 billion [2]. - The company reported a net income of $77.1 million in the third quarter [2]. Group 3: Business Strategy - GameStop is diversifying its business beyond physical video game sales, including ventures into collectibles, trading cards, and aggressive bitcoin purchases [4]. - However, there is a lack of a clear master plan on how these initiatives will achieve the growth necessary to meet the compensation targets [4]. Group 4: Alignment of Interests - The compensation structure aims to align Cohen's incentives with long-term shareholder returns by linking his pay to what GameStop describes as "extraordinary growth" [5].

Jan 7 (Reuters) - GameStop on Wednesday unveiled a compensation package worth roughly $35 billion for CEO Ryan Cohen, hinging on a turnaround that requires him to lift the struggling videogame retailer's ​market value more than tenfold and sharply boost its profit. Hitting the targets will require a significant ‌shift at GameStop, as the brick-and-mortar store operator has been losing millions in revenue in recent years with gamers turning to the ‌web for purchases. The company's annual revenue has plum ...

Core Viewpoint - GameStop is closing stores in multiple states as part of its strategy to reduce costs and adapt to changing shopping habits [1] Group 1: Store Closures - GameStop has already closed 590 stores in the United States during the previous fiscal year as part of a "store portfolio optimization review" [1] - The retailer plans to close a "significant number of additional stores" during its 2025 fiscal year, which ends on January 31, 2026 [1]

Blockbuster Video died because Netflix eliminated the need to go to a video rental store. Once you could stream movies to your home, physically visiting a store to pick up a DVD, which you then had to return, made very little sense. As someone who grew up in the VHS era, I do miss the days when the clerks at Photographics, the video rental store in my hometown of Swampscott, Mass., could recommend a movie for me to watch. Something was lost when brick-and-mortar rental stores closed, but knowledgeable c ...

Core Viewpoint - The comparison between purchasing video games and GameStop stock during the holiday season suggests that investing in GameStop stock has historically provided better returns than buying video games, despite recent declines in stock value [5][8]. Group 1: GameStop's Popularity and Stock Performance - GameStop is a favored retail destination for holiday video game gifts and has gained notoriety as a meme stock following a significant short squeeze in 2021 [2][5]. - The price of GameStop stock on December 24, 2022, was $31.59, allowing a $69.99 investment to purchase 2.22 shares, which would be worth $47.24 today, reflecting a decline of 32.5% [5][6]. - Over the past six Christmases, investing in GameStop stock instead of video games would have yielded a return of $1,490.88 from an investment of $419.94, representing a 255% increase [8]. Group 2: Historical Stock Performance Analysis - In 2019, a $69.99 investment in GameStop stock would have resulted in a value of $979.94 today, marking a 1,300.1% increase [9]. - In 2020, the same investment would have grown to $266.43, reflecting a 280.7% increase [9]. - In 2021, the investment would have decreased to $38.52, showing a decline of 45% [9]. - In 2022, the investment would have appreciated to $72.14, indicating a modest increase of 3.1% [9]. - In 2023, the investment would be worth $86.61, representing a 23.7% increase [9]. - The performance of GameStop stock in 2024, with a price of $31.59, would have resulted in a current value of $47.24, down 32.5% [9].

Core Insights - Michael Burry, known for his role in "The Big Short," expressed regrets about selling his GameStop shares before the stock surged dramatically [1][6] Group 1: Investment Timeline - Burry initially invested in GameStop in summer 2018, identifying it as undervalued with potential catalysts such as a console refresh and strong cash flows [2] - After exiting his position in Q2 2019 due to stagnant stock performance, he reinvested in July 2019, citing high short interest as a new catalyst [3] - Burry held a nearly 5% stake for over 16 months, benefiting from lending his shares at high rates [4] Group 2: Selling and Market Dynamics - Burry sold his shares by the end of November 2020 for an average price of $3.38, significantly higher than his purchase price of $0.83 [5] - Following his exit, GameStop's stock experienced a historic surge, reaching over $120 on January 28, 2021, which could have turned his investment of $12 million into $1 billion [5] Group 3: Reflections on Market Behavior - Burry acknowledged a lack of foresight regarding the meme-stock phenomenon and the role of retail investors, expressing mixed feelings about the events of early 2021 [7] - He warned that retail investors could face significant losses in the meme-stock environment, drawing parallels to his previous experiences during the housing market bubble [7] Group 4: Current Perspective on GameStop - Burry indicated that GameStop's current situation resembles his initial assessment in 2018, with a capital structure that has changed significantly and Ryan Cohen now at the helm [8]