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TL;DR GameStop recent Earnings Results

PUBLISHED Sep 9, 2021, 3:15:21 PM        SHARE

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imgChaster Johnson
  • GameStop made it clear today that they made net sales of $1.183 billion for the most recent quarter, a metric that the CEO says is what investors should focus on
  • GameStop spent $28 million in Capex (capital expenditure, the spending money to make money part) and they expect this spending to keep rising
  • Oh, and the whole board and management has been replaced and the new one is now settled in

So after forty-one minutes of hold music (which you can listen to here), the CEO jumped onto what was about a 10 minute call. What are the key things he said? First off, its obvious they are trying to get into e-commerce. However, with a recent $1.1 Billion raise, the fact they only spent $28 million in capex last quarter was a little alarming. The answer to this was that they are trying to shore up their balance sheet, which is reasonable since they are now flush with money and are trying to growing earning. Earnings by the way were still a loss, but improved from about -$120 Million to -$60 Million.

So now what?

If you are invested in GameStop for the long haul (or if you're stuck with its shares now for the long haul), you should be watching two very obvious things. First is net sales. I'm always suspicious of what a CEO tells you to focus on, but in this case it really is all that matters. If they cannot keep raising sales, more questions should be asked, especially of this new leadership. Next, it's Capex. And this is one that any shareholder can really check for themselves. Their Capex is directly related to their ecommerce platform, so basically, if their ecommerce platform is bad, then they are wasting money.

I hope GameStop can really win thru and give what main street wants. We will keep checking in with GameStop each quarter for more updates.

I/we have no positions in any asset mentioned, and no plans to initiate any positions for the next 7 days

GME, Buy

Gamestop Corpora...
Return: -38.32%

GME, Buy

Return: -38.32%


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