GameStop marketing struggle after trading the frenzy

GameStop video retailer GameStop continues to struggle with falling sales - but its revenue has not diminished the interest rate around its stock.


The Texas company took care of itself in January when its shares rose amid a trade war between Wall Street beauties and commercial investors.

Shares jumped from under $ 20 at the beginning of the year to about $ 350 - and still fluctuate at about $ 180 each.

Analysts say that is much higher than the company's performance.

Sales fell by 3% over the past three months ending January 30 to $ 2.1bn, compared to about $ 2.2bn in the same period in 2019, GameStop said on Tuesday, in an initial financial review for investors since the trade war.

The downturn - the ninth straight downturn - came amid a major store closure, in part due to the epidemic, and even a 175% e-commerce crash.

But profits this quarter have increased, and its annual losses have been reduced, from more than $ 470m in 2019 to $ 215m last year.

The company also said it saw an increase in business in February, as consumers sought the latest gaming consoles.

But Joe Feldman, chief executive of the Telsey Advisory Group, said there was little in the company's review to prove the high enthusiasm that the company's prices mean.

"The stock does not sell the basics," he said, describing the results as "very good", even though he was judged for poor performance last year.

GameStop, which is a mainstay of American supermarkets, had about 5,000 stores in 10 countries in December.

Interest in its prospects - at least among retailers - remains strong. The company's call on Tuesday to discuss the results attracted so many listeners that some of its potential participants were fired.

Without attention, executives declined to ask any questions, although the company indicated that it was considering selling some of the shares for more money, given the attention it received.

Shares in the firm - which has continued to see significant changes since January - have dropped by more than 10% in back trading following the report.

What happened to GameStop?

The benefits offered by GameStop earlier this year were partially promoted by short-term traders, exchanging tips on social media, who saw an opportunity to press Wall Street betting firms against stocks - and would have to buy stocks if prices rose above expectations.

That, in turn, can produce a kind of buying frenzy or “short squeeze” - with the potential for profit for younger boys.

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Aside from financial strategies, many amateur marketers have also said they think Wall Street beauties are destroying the company’s hopes very quickly.

Their biggest confidence is related to the investment of billionaire Ryan Cohen, a 35-year-old businessman who sold his online pet sales company Chewy to Petsmart in 2017 and made a huge investment in GameStop last year.

Since then he has been demanding major changes to the factory, which aims to review the era when most video games are downloaded online.

The company permanently closed about 700 stores last year. The two top executives have recently left, including the company's chief customer officer on Tuesday.

Mr Feldman, whose company said GameStop shares cost about $ 33, said the measures were similar to what traditional traders were trying to do - and they were not enough to bring about a major change in the company's current stock price.

“This is nothing new they are talking about and it is not at all a change in the level I think most Reddit users are hoping and expecting to get out of this company,” he said.