Before a riot in the trading of GameStop Corp. (NYSE: GME) shares due to social media, individual Robinhood-driven buying and short covering, the stock had been down over 80% from the price five years ago. Lost in the massive rally was the fact that GameStop is a failing retailer, in the midst of closing stores and trying to move online to survive.

Just last week, GameStop released numbers for the nine-week holiday period. Revenue dropped 3.1% year over year to $1.77 billion. That puts its annual revenue run rate at $7.1 billion, down from $9.2 billion in 2018. Since the most recent quarter covers the holidays and should be its best of the year, the drop is almost certainly much worse. George Sherman, GameStop’s chief executive officer, commented on the results:

Overall, we remain confident in both the positive growth aspects for 2021 driven by our strategy to add new and exciting product revenue streams across all things games and entertainment and the strong demand for the new generation for console-based video game products We look forward to executing on both of these areas in 2021 to expand our addressable market and product offerings supported by the many exciting opportunities to leverage our brand, extensive loyalty member base, and improving digital capabilities.

The comments mask GameStop’s desperate situation.

GameStop did post an annual same-store sales increase of 4.8%. E-commerce rose 309% and was 34% of revenue for the period. However, that does not offset the erosion of its physical store sales. It is in the midst of closing over 1,000 stores. That is on top of over 700 in the previous two years.

In the most recent quarter for which GameStop released full financial results, revenue dropped from $1.4 billion to $1.0 billion. The net loss was $19 billion, compared to an $83 million net loss a year ago. For the 39 previous weeks, revenue dropped from $4.27 billion to $2.97 billion. The net loss was $296 million, compared to $492 million the year before.

GameStop remains a retailer being consumed by e-commerce giants, particularly Amazon. Its present stock price and market value have no relationship to financial results. GameStop is a $76 stock that should trade for $5.

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