Operating loss of $35 M (compared with operating loss of $312 M in FY22)
Small but notable net earnings of $6.7 M (compared with net loss of $313 M in FY22)
How did GameStop make $50 million in interest income?
GameStop reported full-year profitability for fiscal year 2023, contradicting the prevailing media sentiment that GameStop is a terrible company destined for bankruptcy
From a historical point of view, GameStop was consistently profitable every fiscal year from 2005 through 2016, with the exception of 2012. Starting in fiscal year 2017, GameStop began showing reduced profitability, and from FY 2018 through FY 2022, was unprofitable.
Source: GameStop 10-K filings - Google Sheets
Looking exclusively at revenue, it is clear that there has been a significant reduction starting approximately with fiscal year 2019. Much of this can be attributed to the fact that gamers are increasingly buying games digitally rather than in the form of physical discs such as can be purchased at a brick-and-mortar retail store like GameStop.
Yet, even in fiscal years 2017 and 2018, it is clear that despite high revenues the company was not performing well.
Heading through 2020, GameStop was undeniably a struggling company facing significant challenges, and according to many was destined for bankruptcy. The trading price of GME reflected this prevailing sentiment, and the financial media was dutifully critical.
In 2020, activist investor Ryan Cohen began purchasing shares of GME, ultimately becoming the largest individual owner of the company with approximately 12% ownership. By June 2021, the entire board of directors of the company was replaced by Ryan Cohen and his associates, with Ryan Cohen becoming chairman of the board. From this time onward, control of the company was completely in the hands of this new leadership team.
"We inherited a bunch of legacy everything, and under-investment across the entire business –- people, the entire technology stack, just decades of neglect, and so it’s hard to turn around a brick and mortar retailer that’s under the kind of pressure that GameStop was and continues to be under, but that was also part of the attraction going into GameStop was that a transformation the likes of GameStop was really unprecedented and I was motivated by that."
The company went from a situation where it was losing hundreds of millions of dollars per year to net profitability in fiscal year 2023.
While this is an undeniably positive result for the company in this time period, GameStop continues to face numerous challenges and must continue to improve and adapt in order to successfully compete in the modern video game industry.
What does mainstream financial media have to say about GameStop achieving full-year profitability for the first time in 6 years?
GameStop faces 'unsustainable' sales decline, cuts jobs to control costs
GameStop Q4 Earnings Highlights: Retail Favorite Stock Plunges After Revenue, EPS Miss
GameStop Stock Plummets Following Q4: Profitability Fails to Offset Significant Revenue Miss
GameStop Stock Plunges After Earnings Fall Short of Expectations—Key Level to Watch
Jim Cramer Says GameStop Is Arguably The Worst Company In America
GameStop could be gone in less than 5 years, says analyst
GameStop Needs To Get Its Game Back
GameStop Confirms More Layoffs, Share Price Tumbles After Sales Slide
A Sales Slump Is the Kiss of Death for GameStop Stock
GameStop saga ends. Winner: capital markets
GameStop Stock: Is This The End of a Saga Or Just Another Chapter?
Searching for recent news about GameStop yields mostly negative sentiment that fails to even mention at all that GameStop achieved full-year profitability for the first time in 6 years.
Failing to mention this important detail is a deliberate decision that reveals a clear bias in the media. It goes beyond just reporting about true negative facts about GameStop. It demonstrates a deliberate effort, by those culpable writers and media outlets, to propagate a specific sentiment about the company that is not allowed to even mention contextually important true positive facts about the company.
GameStop was profitable for the first time in 6 years - this is the news headline that captures the significance of GameStop's recent earnings report. Yet, an unassuming person who consumes mainstream financial media likely would not even learn about this important fact at all.
Who would benefit from that?
Why are there competing, mutually exclusive narratives?
There are competing narratives because there are competing financial interests.
One of the listed news articles, GameStop saga ends. Winner: capital markets, from Reuters, draws some attention to this ongoing conflict while declaring that the conflict is actually over and one side has won and one side has lost.
GME shareholders that believe in the company turnaround and leadership, despite the real challenges faced by GameStop, have a vested financial interest in the success of the company, with a desire for the share price of GME to go up, and naturally will promote the narrative that supports this financial interest.
In opposition to GME shareholders are all of the financial market participants that have a vested financial interest in the share price of GME going down. An example of such a participant would be any hedge fund that has a net short position on GME. The article refers to this faction as "shorts", recogonizing that such a faction with an interest does exist. Naturally, members of this faction will promote the narrative that supports their financial interest.
If the prospect of GameStop's success was not an ongoing threat to one faction of incumbent market participants, then there would be no reason to deliberately omit the fact of GameStop's profitability, to pretend that it isn't something that even happened at all.
Recognizing that there is an ongoing financial competition between factions that stand to benefit financially from a particular outcome of the GME share price, which faction benefits when most mainstream financial media articles propagate negative sentiment about GameStop and deliberately ignore the contextually significant fact that GameStop was profitable?
It is clear: much of mainstream financial media is actively propagating biased narratives to the benefit of the faction that has a vested financial interest in the share price of GME going down.
An interactive version of this article can be found at gmetimeline.org/fy23-profitability
For the first 3 quarters of FY 2023, GameStop has posted a total net loss of $56.4 million.
Therefore, in order to achieve full-year profitability, GameStop must achieve greater than $56.4 million in net profit for Q4 2023.
This is certainly achievable, though not guaranteed.
Something like a $100 million net gain for Q4 is possible, but not necessarily very likely.
Therefore, in any case of full-year profitability, at best, the PE ratio for GME will almost certainly be above 100, but will more likely be in the several hundreds, or worse.
By comparison, the average PE ratio for S&P500 is around 25.
https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart
Some PE ratios of other companies:
TLDR: Full-year profitability will be a momentous achievement, but in almost all cases, GME would have a very high PE ratio. Over the following quarters / years, GameStop will still need to increase profits substantially in order to obtain a good PE ratio.
Breakdown of GameStop stores by Technology Brands stores versus Video Game Brands stores versus all International stores
And for fun,
GameStop Net Income Per Store
| Fiscal Year | Revenue | Net Income | Store Count | Revenue Per Store | Net Income Per Store | 10-K |
|---|---|---|---|---|---|---|
| 2005 | $3,091,783,000 | $100,784,000 | 4490 | $688,593.10 | $22,446.33 | link |
| 2006 | $5,318,900,000 | $158,250,000 | 4778 | $1,113,206.36 | $33,120.55 | link |
| 2007 | $7,093,962,000 | $288,291,000 | 5264 | $1,347,637.16 | $54,766.53 | link |
| 2008 | $8,805,897,000 | $398,282,000 | 6207 | $1,418,704.20 | $64,166.59 | link |
| 2009 | $9,077,997,000 | $377,265,000 | 6450 | $1,407,441.40 | $58,490.70 | link |
| 2010 | $9,473,700,000 | $408,000,000 | 6670 | $1,420,344.83 | $61,169.42 | link |
| 2011 | $9,550,500,000 | $339,900,000 | 6683 | $1,429,073.77 | $50,860.39 | link |
| 2012 | $8,886,700,000 | -$269,700,000 | 6602 | $1,346,061.80 | $40,851.26 | link |
| 2013 | $9,039,500,000 | $354,200,000 | 6675 | $1,354,232.21 | $53,063.67 | link |
| 2014 | $9,296,000,000 | $393,100,000 | 6690 | $1,389,536.62 | $58,759.34 | link |
| 2015 | $9,363,800,000 | $402,800,000 | 7117 | $1,315,694.82 | $56,596.88 | link |
| 2016 | $8,607,900,000 | $353,200,000 | 7535 | $1,142,388.85 | $46,874.59 | link |
| 2017 | $9,224,600,000 | $34,700,000 | 7276 | $1,267,811.98 | $4,769.10 | link |
| 2018 | $8,285,300,000 | -$673,000,000 | 5830 | $1,421,149.23 | $115,437.39 | link |
| 2019 | $6,466,000,000 | -$470,900,000 | 5509 | $1,173,715.74 | $85,478.31 | link |
| 2020 | $5,089,800,000 | -$215,300,000 | 4816 | $1,056,852.16 | $44,705.15 | link |
| 2021 | $6,010,700,000 | -$381,300,000 | 4573 | $1,314,388.80 | $83,380.71 | link |
| 2022 | $5,927,200,000 | -$313,100,000 | 4413 | $1,343,122.59 | $70,949.47 | link |
| Fiscal Year | Revenue | Net Income | Store Count | Revenue Per Store | Net Income Per Store | 10-K |
|---|---|---|---|---|---|---|
| 2005 | $3,091,783,000 | $100,784,000 | 4490 | $688,593.10 | $22,446.33 | link |
| 2006 | $5,318,900,000 | $158,250,000 | 4778 | $1,113,206.36 | $33,120.55 | link |
| 2007 | $7,093,962,000 | $288,291,000 | 5264 | $1,347,637.16 | $54,766.53 | link |
| 2008 | $8,805,897,000 | $398,282,000 | 6207 | $1,418,704.20 | $64,166.59 | link |
| 2009 | $9,077,997,000 | $377,265,000 | 6450 | $1,407,441.40 | $58,490.70 | link |
| 2010 | $9,473,700,000 | $408,000,000 | 6670 | $1,420,344.83 | $61,169.42 | link |
| 2011 | $9,550,500,000 | $339,900,000 | 6683 | $1,429,073.77 | $50,860.39 | link |
| 2012 | $8,886,700,000 | -$269,700,000 | 6602 | $1,346,061.80 | $40,851.26 | link |
| 2013 | $9,039,500,000 | $354,200,000 | 6675 | $1,354,232.21 | $53,063.67 | link |
| 2014 | $9,296,000,000 | $393,100,000 | 6690 | $1,389,536.62 | $58,759.34 | link |
| 2015 | $9,363,800,000 | $402,800,000 | 7117 | $1,315,694.82 | $56,596.88 | link |
| 2016 | $8,607,900,000 | $353,200,000 | 7535 | $1,142,388.85 | $46,874.59 | link |
| 2017 | $9,224,600,000 | $34,700,000 | 7276 | $1,267,811.98 | $4,769.10 | link |
| 2018 | $8,285,300,000 | -$673,000,000 | 5830 | $1,421,149.23 | $115,437.39 | link |
| 2019 | $6,466,000,000 | -$470,900,000 | 5509 | $1,173,715.74 | $85,478.31 | link |
| 2020 | $5,089,800,000 | -$215,300,000 | 4816 | $1,056,852.16 | $44,705.15 | link |
| 2021 | $6,010,700,000 | -$381,300,000 | 4573 | $1,314,388.80 | $83,380.71 | link |
| 2022 | $5,927,200,000 | -$313,100,000 | 4413 | $1,343,122.59 | $70,949.47 | link |
The last time GameStop posted positive full-year earnings was in 2017.
There has been a fair amount of talk of GameStop posting full-year profitability for the 2023 fiscal year, which is definitely within reach, but not guaranteed.
If GameStop posts full year earnings for FY23, it will be the first time in 6 years. It will be a momentous occasion!
It will also demonstrate that the prevailing sentiment put out by mainstream media doesn't reconcile with the reality that this company is not the loser that they want the world to think it is.
All of the information in this diagram is derived from this section of the 10-Q:
TLDR:
I recently saw this post and it made me curious to see how Upstart has fared since that CNBC interview was originally aired.
the original video clip appears to be from an October 15, 2021 CNBC interview with a guest by the name of Mark Minervini.
If you go to that CNBC link to view the clip, you will not find the part where Mark Minervini reveals that he has no idea what Upstart Holdings even does, this part has been conveniently removed.
Wikipedia says: "Upstart is an AI lending platform that partners with banks and credit unions to provide consumer loans using non-traditional variables, such as education and employment, to predict creditworthiness. "
By matter of pure coincidence, October 15, 2021, the same day that the original CNBC interview aired, was also the same day that Upstart Holdings was at an all time high market valuation.
So, recap:
CNBC is owned by Comcast, which is 88% owned by institutions (Wall Street)
The purpose of CNBC is the same purpose any propaganda machine.
Wikipedia provides this handy definition of propaganda, emphasis mine:
Propaganda is communication that is primarily used to influence or persuade an audience to further an agenda, which may not be objective and may be selectively presenting facts to encourage a particular synthesis or perception, or using loaded language to produce an emotional rather than a rational response to the information that is being presented. Propaganda can be found in a wide variety of different contexts.
Propaganda is the art of manipulating the perception of the target audience using a variety of lies, deceptions, and omissions of information.
It has been famously said that all warfare is based on deception.
For example in the context of a war, propaganda can be used to motivate your own troops by selling a perception of strength and success, and it can be used to demoralize your opponent's troops by selling a perception of weakness and defeat. In war, propaganda is simply a tool used to help the war-interests of the party that is utilizing the propaganda.
It's the same in the world of finance. Financial propaganda is designed to manipulate perceptions so that the person or party that is doing the manipulating may somehow benefit.
The owner of a propaganda machine like CNBC deploys the art of deception and the outcome is that the audience that consumes it subsequently hands over their hard earned money willingly and places it into the possession of that same propaganda owner.
The victim is led to believe that the information they consumed was a hot tip that might help them make some more money, but of course it was actually just a trap that took their money and gave it to Wall Street in stead.
This is a December 2023 updated version of this chart which was previously posted.
This is a chart that shows information that is relevant to the interests of GME investors.
What is once again glaringly obvious is that mobile is the largest and growing area of video gaming revenue.
As it seems that GameStop is disengaging from web3 related ventures, in order to grow and succeed, GameStop will need to find reliable revenue streams.
How could a company like GameStop get a cut of that mobile gaming revenue?
TLDR: the terms "Book" and "Plan" continue to be deliberately confused, in places of significance, and this is why it's important to continuously reiterate the simple true statement that
Somebody makes a post in superstonk that makes reference to the distinction that plan is not DRS.
In response to this, superstonk mods reply and pin to the top of that post a template message over 600 words in length that would confuse somebody who didn't know better about the plain indisputable reality that Plan is not DRS.
"Plan versus Book" is a misnomer because all electronic shares are book-entry shares. This includes Plan (aka DSPP aka DirectStock) shares and DRS shares.
It only takes 4 words to reiterate the correct truth of this distinction, the distinction being that plan is not DRS, but for some reason this is something that continues to be deliberately confused to this very day in 2024 by people that have authority over the largest online community of GME investors.
The messaging by moderators of the largest GME community has consistently been deliberately confusing and misleading, and will lead to the outcome where uninformed individuals will have an incorrect view about what is DRS and what is not DRS.
Who benefits from this?
Why do the unelected, unaccountable moderators of the largest online GME community continue to perpetrate a misleading view about something that is now so plainly indisputable?
A brief history of "plan versus book":
November 19, 2022 - Ryan Cohen tweets: "I also want to be the book king!"
"Plan versus book" enters the conscious awareness of superstonk, and thousands of people start discussing this.
Superstonk mods, slowly but surely, from Nov 2022 to January 2023, put a damper on these conversations while at the same time injecting their own several-hundred-word-deliberately-confusing message into these threads and pinning that message to the top so that everyone has to see what they want everyone to see, above what the community is talking about. "HEY OP. IT LOOKS LIKE YOU WANT TO TALK ABOUT PLAN AND BOOK. PREPARE YOURSELF FOR 600 WORDS OF PURE CONFUSION"
By January / February of 2023, threads about "plan versus book" disappear from superstonk. On odd occasion a post about this topic would come up, and get removed with a justification like "this post was removed because we already had to moderate this kind of content before!"
if the objective was to prevent further discussion of the distinction between plan shares and DRS shares, it was successful.
in April 2023, a post is made in a different subreddit, r/DRSyourGME, that re-ignites the discussion about this topic that was successfully silenced up to that point
superstonk mods tried hard to censor this topic and remove any and all mentions of what was being discussed over in r/DRSyourGME. But, their attempts at censorship failed.
uh oh. 
the truth is leaking beyond superstonk's walls. Can't have that. superstonk mods publicly denounce the folks from the r/DRSyourGME subreddit and accuse them of acting inappropriately.
Reddit decides to ban the subreddit.
June 2023 to early December 2023 - "plan versus book" once again disappears from the conscious awareness of the largest GME community.
December 2023 - in a live X spaces earnings call for GME Q3 earnings on December 6, an important conversation takes place that once again draws attention to the existence of the distinction between DRS and DSPP. It is once again re-iterated that DSPP is not DRS.
December 8: Why are DRS numbers stagnant? Exploring the possibilities ... Plan is not DRS - post by Chives
December 9: that post is then posted to r/GME
Why is this important distinction being talked about by GME investors but not in the biggest GME investor subreddit?
Apparently, the effort to continue censoring is waning. By whichever reasoning, perhaps out of the self-interested understanding that continuing to censor the topic leads to suspicion, superstonk mods relent and so graciously permit a post about this to exist.
December 22: Plan is not DRS - a post is made by jackofspades123 based on the original post by Chives.
December 22, 2023, to present: After over an entire year of this, the effort to confuse and silence discussions about the distinction between plan and DRS have failed. Censorship is no longer a viable method of information control on this topic. Time to switch gears back towards propagating and pinning a template comment that deliberately confuses the words plan and book, while continuing to ignore the important thing that plan is not DRS.
any new GME investor that is interested in DRS that gets exposed to this misleading information risks having their shares enrolled in a plan, even though what they were really seeking was DRS.
I don't necessarily know who benefits, but I know for certain that individuals seeking to inform themselves about DRS do not benefit when what they actually end up consuming is misinformation.
it's great.
sure, the number of active users here currently doesn't even come close to what r/DRSyourGME once had (around 13k subscribers at the time of getting removed by reddit?).
but i'm excited for the existence of this lemmy instance. it's the first lemmy instance for GME investors, hopefully the first of many.
to this day you still see the conversation pop up around reddit, people concerned that reddit might spontaneously kill superstonk or other related communities for the purpose of silencing the voice of GME investors. i don't know if or when it will happen, but if it ever does, at that time there will be a large amount of fresh interest in ideas like lemmy, and this instance will already be there ready to help people make the transition.
some people see just a shit stock, other people see a great opportunity.
One of my favorite timeless messages / comments from this entire saga, from Mark Cuban, circa mid 2021:
Their goal is to never cover their short. But that would take the company going out of business or being delisted. That won't happen here. Best thing you can do is hold on to the stock and do business with GameStop. If everyone goes to their website and buys from them that is going to help the company which will help the stock which will help everyone here. If you still believe in the reason you bought the stock, and that hasn't changed, why sell?
Why GameStop won’t buy back shares anywhere near these prices.
tldr: a share buyback is not needed and if the price of shares is inevitably going down then let the price get as low as possible, and only then a buyback would be a good move
You have some basic facts wrong and you've also badly mischaracterized the view held by GME investors.
It was not "one website" that disabled the buy button, and it was not just GME that was disabled. Multiple brokers and their clearing houses colluded to disable any further purchasing of GME and other stocks. The incumbent financial institutions colluded to pull this maneuver for a reason, and the reason is that if they didn't do it, for many of them it would meant the end of their existence.
For example, Thomas Peterffy, founder and chairman of Interactive Brokers (one of the brokerages that disabled buying of GME and other stocks) said on Feb 17 that "we have come dangerously close to the collapse of the entire system". What kind of system was it in the first place anyways if the price of a particular stock goes so high that it would cause the system to break?
I think the significance of this entire episode is missed on you, but it might help your understanding if you at least had the basic facts right.
I would like to agree with you, I would like to believe that all of it is honest behavior done in good faith, and this is what I used to believe. But I have a very hard time continuing to believing that. It has been a pattern of censorship and subjugation of the community. The subreddit used to be a place where GME investors could shitpost about whatever, speculate about whatever, and now there are so many rules and restrictions and simply a culture of censorship.
Engagement is way down in that subreddit, and there might be many contributing factors as to why that is, but I believe one big reason is because of the behavior of the mods. We could blame Reddit, and not the mods, for threatening to shut down the subreddit, but lately I've started to feel as if those threats from Reddit were a bluff, used as a justification by those mods to clamp down on the subreddit and destroy the engagement, to destroy the culture of it. Because, who would benefit the most if superstonk were to suffer a slow and miserable death, and GME investors lost their main hangout? And who all has influence into Reddit directly at the top levels? We know for sure that Fidelity does. Fidelity is part of the big club, and they have vested interests in the incumbent system. GME, the idiosyncratic risk, threatens that entire incumbent system.
If Reddit actually had conviction to ban the subreddit, it would have been way too obviously heavy handed censorship in the interest of the financial incumbents, such an action would cause a streissand effect type of reaction, and they know it, and I think they smartly realized that they couldn't do that, at least not back then. So in stead they apparently issued a bunch of threats to the mods, we don't really know all the conversations that happened, and we the community were warned to smarten up, despite that all we were doing was using the platform as designed and intended. Those mods then have leaned heavily into this narrative, that their own heavy handed censorship and putting-up of barriers is for our own good, that they are doing it to protect the interests of the community.
Sorry, but I just don't buy this. If those mods actually gave a shit about the community, they would take mitigating actions to protect the interests of the community. They could, for example, start their own lemmy instance. They could encourage GME investors to start their own lemmy instances. They could have supported the drsgme.org team and helped to spread the message of DRS. In stead, they leaned into censorship, they continue to make the experience less enjoyable for the community participants, they mischaracterize the drsgme.org team and are unsupportive of them, nay, antagonistic towards them, and they will ban you if you so much as suggest that there is a piece of software out there that exists called Lemmy or the fediverse.
Personally, I hope superstonk does get banned by Reddit. I wish that the bluff would get called. Superstonk today is not what it was a year ago, and I imagine that it is only going to get worse as time goes on and as the rules become more restrictive and engagement by legitimate participants disappears. If it were to get banned, it would result in a reaction that I believe would ultimately be beneficial for GME investors because it would force GME investors to go somewhere else that is better, and it would prove once and for all the blatant antagonism that is perpetrated against this community by those that hold power.
this is just comical at this point.
ah yes. it was you Bibic who is not acting in good faith. shame on you for trying to educate GME investors.
at this point the mask is off. superstonk mods have cracked. it's not them that have done anything wrong ever. no, it's everyone else who is guilty of brigading and division and hostility.
at first it was: not allowed to tag users or link to posts in other subreddits.
then it was: not allowed to mention usernames or other subreddits at all.
then it was: not allowed to mention any other communities at all or instant permaban. curiously, you can still post twitter links?
now it's: no mention of the DRSGME.org website.
imagine that. in superstonk, the largest online community of GameStop investors, you are not even allowed to mention a majorly important website created by GameStop investors for the purpose of educating about DRS.
what is even the point of superstonk any more other than to serve the interests of the moderators there? they treat it like it's their own little kingdom and the community is their subjects. what a joke
the superstonk mods have had many opportunities to correct course and put themselves on the right track, to recant their previously held view that has now been repeatedly confirmed to be inaccurate.
instead, the mods have doubled down on arrogance at every turn. zero humility. zero accountability to anyone but themselves. zero recognition of the reality that they are in opposition to the consensus. don't talk about it. don't go somewhere else to talk about it. don't even talk about other places. permaban for even talking about other places. permaban for even suggesting that they were ever wrong.
I just find it funny how the mods of a community with almost 900 thousand members are so threatened by the mere mention of a different online community with merely a few hundred members. what are they so afraid of?
so insecure and controlling, don't even THINK about going somewhere that isn't within their control. but the ironic thing is that the more that they abuse what little power they have in this world, the more apparent that corruption becomes to everyone, which will only accelerate the motivation for people to search elsewhere for discussions.
I tend to agree with this view, that we build resilience by increasing our presence across multiple platforms. The fediverse offers the best possible path forward because it will be much harder for Wall Street incumbents to use their influence to shut us down.
More fediverse instances creates more resiliency. Chop off one head, more heads will grow. this is why I created gmehydra.org, to keep track of fediverse instances that are suitable locations for GameStop investors, places where we can continue to publicly have the very important conversations about GameStop and DRS that are increasingly censored elsewhere.
i share this feeling. the earnings results today were very good. last week i called this a "good outcome" but i've changed my mind. it's very good 🙂
I think it is indisputable: the standing and performance of the company is improving under Ryan Cohen's leadership.