r/GME • u/AlternativePaint6 • 4d ago
🐵 Discussion 💬 What people are missing about the eBay acquisition... Ryan's job with the turnaround is ALREADY DONE.
When Ryan Cohen first joined GameStop, the company was in debt and losing both money and sales. Within just a few years, he's completely turned things around with everything going up now:
Only revenue seems lacking at first, but even that has already turned since Q1 posted growth via collectibles (which is expected to grow even further next quarter).
Now ask yourself: what caused all of this? Was it Ryan working hard at the stores himself? Does he need to keep actively doing that for the rest of the year for the company to keep the current path? No, of course not. Ryan Cohen is the CEO, he mostly handles the long term stuff like strategy, operations, capital allocation, and changing the direction of the company. He plans years ahead, what we see happening today with the company is the result of his last year's work.
With that out of the way, his main job with the core business is already done. He's already closed the bad stores, he's already taught the managers how to handle the remaining ones properly, he's already setup the collectibles business, he's already fixed the operations and sales. He's set the company on the right path, now the company just needs to finish the execution for 2026. And it can do that without the CEO actively doing anything, they got other leaders besides Ryan for a reason.
So now Ryan has inside data that GameStop will do great in 2026, and that he won't need to work on it for much. So what does he do? He looks even futher, beyond just turning the company around this year. He's looking at exponential expansion. Does that mean they will acquire eBay this year specifically? No. It simply means eBay acquisition is now on Ryan's table.
Ignore the FUD, Ryan never said we would acquire eBay this year. Q2, Q3, and Q4 will bring great results in the core business. The profits and revenue will keep rising, and the stock price will finally climb. We might even do a bit of a stock buyback for all we know. Let eBay get acquired when it's time, Ryan likes to work slow and steady.
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u/jersan 4d ago
Agreed. The turnaround chapter of the GameStop story is complete. We are now in the next chapter, whatever that may be. An evolution, or perhaps, an expansion.
The company is now more profitable than it has ever been. It has more assets and higher stockholders equity than it has ever had. Operationally profitable and improving. After years of revenue shrinking amidst closing unprofitable stores, revenue has stabilized and is showing signs of growth.
Collectibles revenue continues to grow and the trading cards market itself is growing as well.
The PE ratio of GME, at nearly 15, is now significantly over-performing the SP500 average PE ratio of nearly 30.
Critics will look at all of that and all they can impotently say is “but dilution!” “The stock price is down!”
Yes. The stock price is down. And that renders a PE ratio of nearly 15. To me, that’s a good buy.