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GameStop surges 28% after co-founder of Chewy.com pitches plan to turn it into Amazon rival

Bullet Club

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Oct 24, 2017
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GameStop surges 28% after co-founder of Chewy.com pitches plan to turn it into Amazon rival, report says
  • GameStop surged 28% on Tuesday after a report from Bloomberg detailed a yet-to-be-revealed investment plan for the retailer to expand into ecommerce and rival Amazon.
  • Ryan Cohen, a co-founder of pet supplies ecommerce company Chewy.com, has acquired a near 10% stake in the video-game retailer and is holding talks with the board and several directors, according to Bloomberg.
  • Cohen's plan is for GameStop to begin selling and quickly shipping "a wide range of merchandise" to its customers, inline with one of Amazon's core strength.
  • Cohen is willing "to become more involved" in GameStop in order to "produce the best results for all shareholders," according to a regulatory filing.
GameStop surged on Tuesday after a report from Bloomberg detailed an investor's yet to be seen plan to turn the video-game retailer into an Amazon rival.

Ryan Cohen, co-founder of Chewy.com, wants to apply the same successes employed at the pet supply ecommerce retailer to GameStop, according to the report, which cited a person familiar with the matter.

That is, mainly, to sell a wider range of gaming related merchandise and services online, and to ship it to customers quickly, essentially replicating one of Amazon's many core strengths.

One example of an imitative Cohen is advocating for, according to Bloomberg, is for GameStop to allow customers to sell used games to the company online and ship them the used game rather than only being able to do that in a physical store.

More game-streaming subscriptions is another avenue Cohen wants the company to explore offering, according to the report.

According to a regulatory filing, Cohen has amassed a 9.8% stake in GameStop and is willing "to become more involved" in the company inorder to "produce the best results for all shareholders.

It's unclear if GameStop will implement any of Cohen's proposals, Bloomberg said, though the motivation is clear: to avoid GameStop from suffering the same fate of many shuttered brick and mortar retail companies.

Shares of GameStop were already on the rise before today's move higher, as investors bid up the company in anticipation of a new cycle launch of next generation gaming consoles from Sony and Xbox.

GameStop is now up roughly 44% year-to-date, and surged as much as 28% to $11.17 on Tuesday.

Source: Business Insider
 
Oct 4, 2013
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www.thunderboltgames.com
chewy.com?

 

Darkmakaimura

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Dec 12, 2008
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If it's anything like their brick and mortar stores where they sell opened games as New and only supply games released in the last 6 months, forget it.

At least with Amazon and eBay, I know I'm getting a factory sealed game and I can buy older games.
 
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May 25, 2014
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Yeah, right! "Rival amazon" HA

Bet this chewy dude has some underhanded plan to make money from this even if it fails. "Willing to become more involved" riiight
 

TKOFromTokyo

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I will say that I rarely buy physical games at a brick and mortar store anymore. It’s mostly because the experience lacks any kind of excitement. When I go into GameStop, rarely but usually after work, I feel like I look like a pedo going in business casual clothes surrounded by a dirty layout and kids or people who look like they live in their parent’s basement.

Put a fork in them, they are too late to the game to implement an effective online strategy.
 

TKOFromTokyo

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Jul 20, 2020
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I will say that I rarely buy physical games at a brick and mortar store anymore. It’s mostly because the experience lacks any kind of excitement. When I go into GameStop, rarely but usually after work, I feel like I look like a pedo going in business casual clothes surrounded by a dirty layout and kids or people who look like they live in their parent’s basement.

Put a fork in them, they are too late to the game to implement an effective online strategy.

This didn’t age well.
Super Troopers Oops GIF by Fox Searchlight


To be fair, this current price surge is temporary and will crash back down after the squeeze is over.
 
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Captain Toad

I advertise for PlayStation. For free.
Dec 1, 2020
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This didn’t age well.
Super Troopers Oops GIF by Fox Searchlight

Maybe, maybe not. The stuff going on right now has little to do with the actual business of GameStop. They just, almost randomly, got caught in the middle.

It may put them in a better place to have a shot of transforming their current business into something new, but it could still easily crash and burn. 95% of the concerns people had about GS before this craziness will still exist going forward.
 
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crozier

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Apr 18, 2013
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GameStop really has no choice but to diversify. It may not happen this generation, or possibly even next, but digital is the future. Customers need a reason to go in there that isn’t physical disks.
 
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TKOFromTokyo

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The rise to 20 from 2 had little to do with a short squeeze, with their new outlook and strong online numbers a 40-50 Valuation seems conservative.

Yes, I agree with the first part of your statement. I’m not yet convinced that their business model has addressed the long term concerns that exist in their business. They still have a significant brick and mortar footprint which I worry about.
 

Andodalf

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Oct 20, 2013
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Yes, I agree with the first part of your statement. I’m not yet convinced that their business model has addressed the long term concerns that exist in their business. They still have a significant brick and mortar footprint which I worry about.
If they can turn a profit with COVID I think they don't have to rely on their brick and mortar too much, and any value they can get their should be great for them.
 

VictorVectors

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Nov 24, 2020
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Buying digital from Amazon is a huge pain in the ass.

Amazon is totally fine for buying Nintendo and Microsoft and Sony bux but AWFUL for actual titles.

If they can find a way to transform GameStop into something that makes enjoying the process of finding something new and fun to play more fun, then $100 GME seems fair.
 

TKOFromTokyo

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If they can turn a profit with COVID I think they don't have to rely on their brick and mortar too much, and any value they can get their should be great for them.

But they’re not making a profit. If you look at their most recent 10Q, their Operating Losses and EBITDA are 256.6MM and (195.5)MM for 39 weeks ended October 31, 2020, respectively. Operating Cash Flow is (41.1)MM. Sales have been crushed YoY. They have a good amount of operating leases on the books relating to storefronts. 2021 is going to be an interesting year to see how many more locations are shut down. The things that have helped is that they have a good BS and have had a lot of cash.

I just read their holiday sales report. E-commerce sales YTD through 1/2/21 are over $1.35B, and approx 34% of sales. That’s promising at least. However, you need to take into consideration that it offsets losses retail traffic, which they point out. I’d be curious about EBITDA as retail stores are going to continue to carry costs and expenses despite decreased sales. Long term, I have concern about lost margins on used games as digital sales become more common, as well as market share of digital game sales if console makers, or possibly even publishers, want to start to limit 3rd party sellers to retain higher margins themselves.

I’m not yet convinced their current model is sustainable long term like a more diversified seller like Walmart, Target, Amazon, or even Best Buy.
 
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TKOFromTokyo

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Sorry, I didn’t mean to kill the thread with numbers. Q4 will be revealing as they are retail and we had console launches. You have to expect sales to increase in 2021 as new consoles become available and new titles for them.
 

oagboghi2

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Apr 15, 2018
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Yeah because this was totally within reason of happening.

*squeeeeeeeeze*

Crash soon bros!
Gamestop stock rising after bringing on new people to the board, making a new partnership with Microsoft, and the holiday sales propelled by new consoles, was actually a pretty fucking obvious assumption, even back in September. That's why I bought stock in it. Anticipating the stock to rise by 5-10 dollars was a smart bet
 
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SLoWMoTIoN

Unconfirmed Member
Gamestop stock rising after bringing on new people to the board, making a new partnership with Microsoft, and the holiday sales propelled by new consoles, was actually a pretty fucking obvious assumption, even back in September. That's why I bought stock in it. Anticipating the stock to rise by 5-10 dollars was a smart bet

The MS partnership had something to do with all this?
 

Indyblue

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Dec 13, 2020
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“Ok so yeah we’ve almost been bankrupt for like years and we’ve closed hundreds of our stores and every consumer hates us but....have we thought about just becoming Amazon?”
 

D.Final

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Oct 18, 2018
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GameStop surges 28% after co-founder of Chewy.com pitches plan to turn it into Amazon rival, report says
  • GameStop surged 28% on Tuesday after a report from Bloomberg detailed a yet-to-be-revealed investment plan for the retailer to expand into ecommerce and rival Amazon.
  • Ryan Cohen, a co-founder of pet supplies ecommerce company Chewy.com, has acquired a near 10% stake in the video-game retailer and is holding talks with the board and several directors, according to Bloomberg.
  • Cohen's plan is for GameStop to begin selling and quickly shipping "a wide range of merchandise" to its customers, inline with one of Amazon's core strength.
  • Cohen is willing "to become more involved" in GameStop in order to "produce the best results for all shareholders," according to a regulatory filing.
GameStop surged on Tuesday after a report from Bloomberg detailed an investor's yet to be seen plan to turn the video-game retailer into an Amazon rival.

Ryan Cohen, co-founder of Chewy.com, wants to apply the same successes employed at the pet supply ecommerce retailer to GameStop, according to the report, which cited a person familiar with the matter.

That is, mainly, to sell a wider range of gaming related merchandise and services online, and to ship it to customers quickly, essentially replicating one of Amazon's many core strengths.

One example of an imitative Cohen is advocating for, according to Bloomberg, is for GameStop to allow customers to sell used games to the company online and ship them the used game rather than only being able to do that in a physical store.

More game-streaming subscriptions is another avenue Cohen wants the company to explore offering, according to the report.

According to a regulatory filing, Cohen has amassed a 9.8% stake in GameStop and is willing "to become more involved" in the company inorder to "produce the best results for all shareholders.

It's unclear if GameStop will implement any of Cohen's proposals, Bloomberg said, though the motivation is clear: to avoid GameStop from suffering the same fate of many shuttered brick and mortar retail companies.

Shares of GameStop were already on the rise before today's move higher, as investors bid up the company in anticipation of a new cycle launch of next generation gaming consoles from Sony and Xbox.

GameStop is now up roughly 44% year-to-date, and surged as much as 28% to $11.17 on Tuesday.

Source: Business Insider
Maybe exaggerated I think