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posted by Fnord666 on Friday June 11 2021, @01:04AM   Printer-friendly
from the sharp-pointy-lines dept.

GameStop stock falls sharply amid 5M-share sales plan, SEC investigation:

GameStop's quarterly earnings report, released last night, contained relatively good news for the embattled retailer, including a smaller-than-expected operating loss and the company's first year-over-year increase in quarterly revenues in years. But GameStop's heavily inflated stock price is down significantly in morning trading on news that the company plans to sell more shares and the announcement that it is cooperating with a Securities and Exchange Commission investigation into the "meme stock" phenomenon.

In what CEO George Sherman called a "strong start to the year," GameStop's net sales were up over 25 percent to $1.3 billion in the fiscal quarter ending on April 30. That's despite "a roughly 12 percent reduction in the global store fleet due to our strategic de-densification efforts and the continued store closures in Europe during the quarter due to the COVID-19 pandemic."

Previously:
GameStop (The Stock) and GameStop (The Retailer) Continue to be Worlds Apart
GameStop Shares Rise, Fall and Rise Again in Roller-Coaster Day of Trading
The Complete Moron's Guide to GameStop's Stock Roller Coaster


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  • (Score: 3, Insightful) by bzipitidoo on Friday June 11 2021, @05:12AM (3 children)

    by bzipitidoo (4388) on Friday June 11 2021, @05:12AM (#1144178) Journal

    > Gamestop was set to join Radio Shack, Sears and Toys-R-us.

    And Blockbuster.

    Yeah, why does Gamestop even still exist? I don't see a point to a dedicated store front for computer games any more. The huge overhead of that compared to downloading drives prices up, by a lot I should think. Shouldn't have lasted this long, except that developers clung to the hope that the old delivery method could stem piracy. Expect the pandemic delivered a critical hit that should have finished them off, if not for the market manipulation.

    Every time I bought a game at retail, I got less than I was led to expect. The game wasn't finished, or was missing crucial things such as an instruction manual, that had to be purchased separately as a "hint book". Then you inevitably had to buy expansions. And it was very expensive. When I quit, $60 was the going rate for the base game. High though that was, it was far cheaper than the subscription MMORPG thing, which I tried for a few years.

    Now, the only games I touch are freebies, and Humble Bundle or GOG, for download. No, I don't care for Steam either. Humble Bundle pushes Steam a lot, and have to watch for that. If I can't get a DRM free version, I don't play it.

    As to the stock market manipulation, well, yes. The only thing I wonder is, why Gamestop? Why that stock? It must be that they're small enough, and are in bad shape.

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  • (Score: 3, Interesting) by Anonymous Coward on Friday June 11 2021, @05:55AM

    by Anonymous Coward on Friday June 11 2021, @05:55AM (#1144186)

    The only thing I wonder is, why Gamestop? Why that stock? It must be that they're small enough, and are in bad shape.

    No. It's because WSB noticed that the hedge funds had sold 140% of the existing stock.

    A car analogy.

    Pretend there are only ten 1925 Model T's left in the world. I don't own any, but I sell fourteen of them. WSB notices this and starts buying Model T's. They manage to acquire 6 real ones, leaving 4 out there.

    I now need to buy 14 Model T's to deliver on the sales. The only way I can possibly do that is to buy all the Model T's I can at whatever price I have to pay, deliver them, then buy them back and deliver them again.

    WSB says "We're not selling". The other four are getting traded back and forth frantically trying to cover up the fact that I and my friends only have four. There is no option to cancel the original sales, I HAVE TO buy those 14 model T's, regardless of how high the price goes.

  • (Score: 5, Interesting) by Revek on Friday June 11 2021, @12:58PM (1 child)

    by Revek (5022) on Friday June 11 2021, @12:58PM (#1144232)

    You miss the point. Radio Shack, Sears and Toys-R-us would still be here if not for the less than legal tactics of the hedge funds. What they were doing was using illegal market tactics to run them out of business. The penalty for their illegal tactics was a pitiful fine. The SEC just fined them and got a small cut of their profits. You are hyper focused on own experiences with games and miss the larger picture. I didn't like gamestop very much and have never shopped there but I did like going to radio shack every now and then. I did take my kids to Toys r us. Those companies are just the tip of the iceberg when it comes to the lives those psychos that run the hedge funds have ruined. All so they could make tax free billions.

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    • (Score: 2) by bzipitidoo on Friday June 11 2021, @05:14PM

      by bzipitidoo (4388) on Friday June 11 2021, @05:14PM (#1144301) Journal

      Ah, didn't know hedge funds were behind those. Toy-R-Us I know was different, yes. Another toy store that was destroyed was Kay-Bee. I got the impression that one was that some rich boys wanted to play around at managing a business, acquired Kay-Bee, and through incompetence and carelessness ran it into the ground. One of the highest profile cases was the demise and resurrection of the Hostess Twinkie.

      A term I've heard for this, in relation to smaller nations trapped with huge amounts of foreign debt, is "vulture capitalism". Inflict massive austerity and runaway inflation on the victim nations, drive them into default, so that hedge funds can make huge profits off the interest and panic selling of bonds.