Well forget about “Retro Gaming” and printing money out of thin air, because yesterday's earnings just respawned the narrative that GameStop may as well be dog sh^t wrapped in cat sh^t (Looking at you, Roaring Kitty). 

(Source: Giphy) 

In short, GameStop’s boardroom is probably quieter than a “Call of Duty" lobby after the servers crashed due to the fact they managed to do one thing investors hate more than loot boxes: lose money and not provide any guidance. Oh, and Ryan Cohen is basically a coward considering he didn’t host a conference call, because you know, why explain yourself when you can just… not? 

(Source: Market Watch) 

For instance, GameStop’s revenue for the quarter came in at a dismal $798 million, which, for those keeping score, is a 31% drop from last year. Analysts were hoping for something closer to $896 million, but hey, missing revenue is basically GameStop’s new business model at this point. 

(Source: Investopedia) 

With that said, surprisingly enough, GameStop did pull off a surprise profit of 4 cents per share (although net income is down a blistering -$17.5 million), but when your revenue plunges harder than my kid brother's win rate in "Fortnite," that tiny glimmer of hope barely registers. Investors don’t care about a few pennies when #1. There’s a massive gaping hole in revenue decline and #2. No earnings call to explain themselves… no strategy…  just sh^tty vibes. 

(Source: Giphy) 

So what’s the deal here, especially considering GameStops new “retro” move and its breakup with Wells Fargo credit lines sparked some investor optimism last month? Well, it basically comes down to the fact that no one is rushing to the Nerd Capital to buy physical games anymore. Sales of hardware and accessories fell 25% to $451 million, while software sales nosedived a staggering 48%. Even their so-called “bright spot”—collectibles—only managed a 17.5% increase. 

Which, might I add, doesn’t necessarily ignite any additional hope for the Retro stores GameStop is said to be injecting into its arsenal of revenue streams. 

(Source: Seeking Alpha) 

So clearly, given these new numbers, the shift to digital gaming is no longer on the horizon—it’s here. And GameStop is still acting like it’s 2010, trying to sell you a physical copy of "Madden" while everyone else is downloading it. Analyst Stephanie Wissink at Jefferies summed it up best: "GameStop continues to face an uphill battle" as digital gaming takes over and the console cycle disappoints. Translation: GameStop is stuck in the past, and that’s a terrible place to be when your entire industry is moving to the cloud.

Additionally, Michael Pachter at Wedbush Securities, who’s been giving GameStop an “underperform” rating for what feels like eternity, not only detailed that the decline in subscriptions and hardware sales foretell significant headwinds for the company going forward, but he also called out management for ghosting investors. No conference call? No guidance? See: Tell me your company is sucking big ones without telling me your company is sucking big ones

(Source: Stock Invest) 

This obviously brings me back to the man of the hour with this latest GameStop fiasco, CEO Ryan Cohen. You’d think the guy who helped turn Chewy into a multi-billion dollar business would have some brilliant plan for GameStop by now, but instead, the dude seems to be non-existent with any kind of conquest over the company’s hurdles. (Or he could just be too busy pissing off Liberals on Twitter, who knows).

(Source: X) 

Regardless, the fact is, it’s been two years since Cohen took the helm, and we still don’t know what his grand vision is. But hey, at least they’ve got cash right? With $4 billion in the bank, GameStop could, in theory, buy its way out of this mess. Especially considering the company recently launched a stock offering to sell 20 million new shares, which basically indicates a quick way to raise money for acquisitions and investments.

(Source: XM) 

The problem is, without a clear strategy in hand to follow the influx of cash and new stock offerings, investors are taking this move as throwing darts in the dark. 

So in the end, it’s obvious that this latest earnings report does not provide any momentum for the company’s financials, no matter how many times Roaring Kitty steals the spotlight. And while the meme stock legend could boost shares with his “I just like the stock” narrative - deep down, we all know the guy may just be full of hot air, and maybe, just maybe as guilty of manipulating stock prices as Jane Street manipulates the entire market. 

(Source: Giphy) 

Now obviously, you can take what you want out of all of this, but it’s clear that with revenue down, digital gaming eating GameStops lunch, and Wall Street losing its patience - the clock is ticking for the meme stock.

It ain’t 2021 anymore folks. Those days are long gone and making your business strategy dependent on degenerate traders inflating your stock price day in and day out just doesn’t cut it. 

(Source: Giphy) 

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Stocks.News holds no positions in companies mentioned in the article.