• In the years preceding 2021, GameStop was a struggling company that was often viewed as likely heading towards bankruptcy
• The company continues to close stores, reducing store count from around 4,800 in 2020 to below 4,000 by the end of 2024, focusing on fewer, more profitable locations
• CEO Ryan Cohen’s strategy emphasizes cost-cutting, profitability, and a selection of higher-value items that align with GameStop’s trade-in model
• Although revenue has declined dramatically since 2018, GameStop achieved net profitability in FY23 for the first time in six years
• By raising nearly $3.5 billion from at-the-market offerings in 2024, GameStop built a large cash position, earning interest income that helps offset operating losses and sustain profitability
• Core financial metrics show significant improvements to the company since the turnaround efforts began

GameStop was struggling, and a prevailing sentiment was that the company was headed towards bankruptcy.

Activist investor Ryan Cohen became the largest individual shareholder of GameStop in the second half of 2020 and wrote a letter to the then-board of directors urging a decisive pivot from a traditional, brick-and-mortar approach to a more technology-driven model. Ryan Cohen secured board seats and eventually ascended to the position of chairman of the board of directors in June 2021. Under his leadership, Cohen assembled a board aligned with his vision, aiming to modernize GameStop’s operations and reimagine its business as a digitally-focused enterprise.

A social media and stock market phenomenon drew much attention and enthusiasm for GME and a large number of new investors / shareholders. Enthusiastic investing of GME has entailed elevated share prices which the company has been able to capitalize on and raise billions of dollars, greatly strengthening the financial position of the company.

By June 2021, Ryan Cohen and the new board of directors were in the position to initiate the turnaround of the company. This has involved extensive cutting of costs, closing of stores, and modernization of a company that had previously failed to adapt with the modern era.

"David versus Goliath" - RC tweet on October 26, 2021

GameStop has made substantial efforts to upgrade and modernize its online store and enhance its overall omnichannel experience. This has included investing in a more user-friendly and mobile-responsive website, streamlining the checkout process, and improving product availability and search functionality. Additionally, the company has integrated buy-online-pickup-in-store and same-day delivery options.

In September 2023, Ryan Cohen became the CEO of the company. In December 2023, the board approved a new investment policy which gave Ryan Cohen the authority to manage the company's investment portfolio.

In March 2024, the company reported full-year profitability for the first time in 6 years.

In 2024, the company completed 3 at-the-market equity offering programs, raising approximately $3.5 billion in cash, raising the book value per share of GME to nearly $11.

In 2024, GameStop began selling new original products such as Candy con controllers and the Raptor 8 mobile gaming controller.

In addition to the release of new original products, GameStop has also expanded into the graded trading card market.

The turnaround of GameStop has been in progress for about 3 and a half years, depending on when the precise start point is.

A look at the core financial metrics shows significant improvements to the financial standing of the company.

GameStop has raised cash and eliminated practically all of the debt that it had. Now holding a large pile of cash, the company earns interest income rather than paying interest on debts.

GameStop continues to close more stores every year, a trend that began before the initiation of the company turnaround. As GameStop closes more stores, the revenue continues to decrease, as does the SG&A expenses.

While operating income has seen significant improvement, it remains negative.

There is growing evidence that GameStop is undergoing some kind of transformation, though the exact nature of its evolution remains unclear.

While details remain scarce, GameStop’s leadership has repeatedly signaled that the company is positioning itself for a future with a potentially different business model. Whether this transformation involves a deeper focus on technology, digital assets, or another industry altogether is uncertain. However, what is evident is that GameStop is no longer the same company it was just a few years ago.