GameStop Is Junk

GameStop Corp. (NYSE: GME) has named a new chief financial officer and instituted layoffs. The stock dropped 10% after the announcement. It should be no surprise. GameStop is a company in grave trouble.

Departing CFO Michael Recupero was terminated without cause.

GameStop’s shares have been on a wild ride as individual investors have piled into and out of its stock, which reached $483 in January — for no reason. Within a matter of weeks, they had dropped to $39. The shares, the price of which has stabilized, trade near $130.

GameStop revenues barely rose in the most recently reported quarter, from $1.28 billion to $1.38 billion. The company lost $158 million. GameStop management said it had just over $1 billion on hand in cash and cash equivalents. Barron’s characterized these numbers as disappointing.

One weakness GameStop has is that it launched a cryptocurrency wallet just over a month ago, before the crypto market was shattered.

GameStop’s primary problem is that, like many other companies, it lives in the shadow of Amazon. The huge e-commerce public corporation will push its video game products aggressively on Prime Day. Even with the sale, some experts believe video game sales have peaked. It appears that console sales by Microsoft and Sony have leveled off.

GameStop’s future is a tough one. The notion that it can recover is wrong.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.