GME posted record Q2 operating income and the stock still fell.
Bulls say Wall Street doesn't understand the turnaround. Maybe Wall Street understands it perfectly.
The $160.2M operating profit is real. But part of net income reportedly came from the value of GameStop's huge EBAY stake. That is market movement, not money earned from selling games or collectibles.
If EBAY rises, GME looks richer. If it falls, reported earnings get weaker. That kind of profit deserves a different valuation from profit made by customers actually buying things.
Honestly, GME now looks less like a normal retailer and more like an investment company with stores attached.
The retail number I care about is collectibles: 45.1% of sales, up 57%. If that keeps growing and the stores can support the $650M+ adjusted EBITDA outlook, then the bears have a real problem.
But "record profit" does not always mean the core business suddenly became amazing.
One important check: adjusted EBITDA normally excludes investment gains. Also confirm whether the reported $4.9B EBAY position is already included in the $5.4B cash-and-securities figure—adding both could double-count the same assets.
Bulls say Wall Street doesn't understand the turnaround. Maybe Wall Street understands it perfectly.
The $160.2M operating profit is real. But part of net income reportedly came from the value of GameStop's huge EBAY stake. That is market movement, not money earned from selling games or collectibles.
If EBAY rises, GME looks richer. If it falls, reported earnings get weaker. That kind of profit deserves a different valuation from profit made by customers actually buying things.
Honestly, GME now looks less like a normal retailer and more like an investment company with stores attached.
The retail number I care about is collectibles: 45.1% of sales, up 57%. If that keeps growing and the stores can support the $650M+ adjusted EBITDA outlook, then the bears have a real problem.
But "record profit" does not always mean the core business suddenly became amazing.
One important check: adjusted EBITDA normally excludes investment gains. Also confirm whether the reported $4.9B EBAY position is already included in the $5.4B cash-and-securities figure—adding both could double-count the same assets.
