GameStop Dressed Up Its Earnings With Accounting Magic… Then Snuck Out Before the Questions Started

Back in high school, there was always that one dude on the opposing basketball team who wouldn’t shut up during warmups. You know the guy… rocking a shooting sleeve like he’s Carmelo Anthony, barking about “dropping 30 tonight,” doing unnecessary spin moves in layup lines like he’s filming his mixtape for BallIsLife. Then the game starts… and this walking ESPN highlight reel goes 0-for-7, airballs a free throw, and ends up crying on the bench.

And here’s the thing… this doesn’t stop when you grow up. In the business world, the same kind of person shows up. The guy who talks a big game in pitch meetings, name-drops billionaires on LinkedIn, posts daily motivational quotes… but when it’s go time? When it’s time to deliver? They’re nowhere to be found. That, ladies and gentlemen, is GameStop.

The company just dropped earnings (and despite the Bitcoin chest-thumping, meme reposts, and Michael Saylor copying) the numbers reminded everyone: this is still a struggling video game retailer. You know what they say… you can put lipstick on a pig, but it’s still not beating earnings.

So let’s get into the numbers. GameStop reported Q1 revenue of $732.4 million. That’s not horrific… unless you realize it’s down 17% from the same time last year and missed analyst expectations of $754.2 million (so yeah, it was pretty bad).

To make matters worse… Hardware revenue collapsed from $505.3 million to $345.3 million. Software fell from $239.7 million to $175.6 million. That’s a pretty steep drop for a company that, on paper, still claims to be in the business of selling video games. The only thing that went up? Collectibles… which hit $211.5 million, up from $136.8 million. So yeah, if you’re into Funko Pops and Pokemon cards, you deserve an award.

In the middle of all this, GameStop went full MicroStrategy and bought 4,710 Bitcoins (roughly $513 million worth) between May 3 and June 10. And my favorite part is that they paid for it with… wait for it… debt. They funded the purchase through a $1.3 billion convertible notes offering. Cool idea. But crypto investors aren’t exactly known for sticking around when things get boring, and let’s be honest… GameStop hasn’t exactly been lighting up the scoreboard.

Yes, they posted their fourth consecutive quarterly profit… $44.8 million, or $0.09 per share. On an adjusted basis, they even beat expectations with $0.17 per share. But don’t get too excited. This profit wasn’t driven by growth. It was driven by cost-cutting and a couple slick moves with their balance sheet. Oh, and they didn’t even hold a conference call, which is quickly becoming GameStop’s signature move. I’m not the sharpest knife in the drawer, but nothing says “trust us” like refusing to take questions.

So… what are we even doing here? Revenue is sliding… the core business (selling physical games in a world that now streams everything from Mario to Madden) is still a shell of what it used to be. And instead of fixing that, GameStop decided to become MicroStrategy and buy Bitcoin with debt, like it’s 2021 and Reddit’s still single handedly running the market.

Meanwhile, the stock is down 1% this year (and even that is partly just a bunch of diamond hands). And yet, people still want to believe this is the next Nvidia. That this is all part of some master plan where meme magic and Bitcoin eventually turn a mall kiosk into a tech empire. But here’s the truth: GameStop is still that dude in the warmup line yelling “AND ONE!” after clanking a wide-open layup. It doesn’t matter how loud you are… the scoreboard doesn’t care.

Until GameStop finds a way to rebuild its core business (and no, turning into a Bitcoin hoarder with $6.4 billion in cash doesn’t count) this isn’t a comeback. It’s a rerun. The same old meme-stock fantasy playing out one more time for a crowd that still thinks this is 2021.

Fairytales are fun. Laser eyes are cool. But eventually, the lights come on, the music stops, and that magical pumpkin ride turns back into what it always was: a used-game store trying to find a second act. At this point, the only hope might be for Roaring Kitty to crawl out of hibernation, throw on a fresh pair of shades, and rally the troops one more time. Because if he doesn’t? It’s only going to get uglier from here.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.