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# GameStop: Boom or Bust? | Nasdaq Back in mid-2020, **GameStop** (GME) was sitting at all-time lows, due to massive short positions by powerful hedge funds. With over 140% of shares short, it became a prime candidate for a short squeeze. As the word spread on social media, the short squeeze began, leading to a gamma squeeze and pushing GameStop’s share price up almost 19,000% in just over 9 months. However, since then, the stock has experienced an 84% pullback from its highs, leading many to speculate if it’s a value play at current levels. Certainly, some investors may view the current price of around $17 and compare it to the $120 highs from a few years ago, making them consider buying at this level. Several analysts have recently praised GameStop for paying down a significant amount of its debt, improving its financial position. The company’s Debt/Equity ratio is currently at 50%, which is lower than the average of reporting companies. In contrast, tech giant Apple (AAPL) has a Debt/Equity ratio of 181%. GameStop also holds $1.19 billion in cash, giving them financial flexibility. However, the financial picture is not all positive. GameStop has been consistently losing money since 2020, with negative profit margins, return on equity, return on assets, and earnings per share. The company does not pay dividends, which raises questions about its sustainability. When examining GameStop’s business model, its revenue comes from three main sources: hardware & accessories (53%), software (30.7%), and collectibles (16.3%). While GameStop may be a go-to place for buying consoles and accessories, the trend of buying games has shifted online. Game makers now prefer streaming or digital downloads over physical CD or DVD sales. This trend will continue to challenge GameStop’s game sales revenue. On the other hand, collectibles may become one of GameStop’s best-performing revenue generators. With over 4,400 physical stores worldwide, GameStop has a strong network to sell collectibles and connect the global collector community with in-center events. When comparing GameStop’s trajectory to that of Blockbuster, similarities arise. Blockbuster was once the go-to place for renting movies, but as video streaming gained popularity, Blockbuster’s business declined rapidly. Today, only one Blockbuster store remains open in Bend, Oregon. GameStop faces a similar challenge in the digital age. The upcoming movie “Dumb Money,” which tells the GameStop short squeeze story of 2020, may spark renewed interest in GameStop stock and create a short-lived rally. However, unless GameStop can reinvent itself, its share price is likely to continue its downward trajectory. In conclusion, investing in GameStop shares may not be a wise decision considering the company’s financial struggles and the changing landscape of the gaming industry. As with any investment, different perspectives and opinions exist, and it’s crucial to consider various factors before making a decision.

James TaylorBy Updated:No Comments1 Min Read
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A writer and finance enthusiast who loves diving into the exciting world of stocks, commodities, forex, and crypto. I'm all about making the financial markets less intimidating and more accessible, so I write engaging content that simplifies complex concepts and shares practical investment strategies. Whether you're a seasoned investor or just getting started, I've got your back! But hey, life isn't all about work, right? On weekends, you'll find me hanging out and having a blast with my awesome friends and family. We love bonding over shared interests, trying out new adventures, and simply enjoying each other's company. Striking that balance between work and play is super important to me, because what's the point of success if you can't share it with the people you love? So, if you're up for some financial market insights and a good dose of weekend fun, stick around! Together, we'll navigate the money world and make the most of our time off. Let's learn, grow, and create memories along the way!

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# Target to close 9 stores across 4 states, citing theft Big-box retail chain Target Corp. announced that it will be closing nine of its stores next month due to organized retail theft, which has posed a threat to the safety of its employees and customers. The affected stores are located in New York, Seattle, San Francisco, Oakland, and Portland, and will be closed on October 21. Target assured that eligible team members will be given the opportunity to transfer to other Target locations. In a statement, Target explained that the decision to close these stores was made in order to address the safety concerns caused by theft and organized retail crime. The company emphasized the importance of providing a safe working and shopping environment for all. Target management shared that they have taken various measures to prevent theft, such as hiring additional security staff, utilizing third-party guard services, and implementing other theft-deterrent strategies. They also highlighted that many Target stores in the affected cities will remain open and mentioned their contributions to the local communities through donations and volunteer work. As a result of this announcement, Target’s stock saw a decline of 2.4% on Tuesday. This decision comes after several months of complaints from retail executives regarding the impact of theft on their businesses, particularly during the latest round of retailers’ earnings reports. However, critics argue that crime data can be subjective, and previous reports have indicated that theft rates in 2021 were similar to previous years. During Target’s quarterly earnings call last month, CEO Brian Cornell disclosed that there had been a 120% increase in theft incidents involving violence or threats of violence during the first five months of the year. He expressed concern over the high level of retail theft and organized retail crime that the company continues to face.

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