I just can't foresee what digital transformation Ryan Cohen has in mind for GME when he takes over. He wouldn't be doing this if he didn't have some sort of plan, but what makes sense?
Middleman role? Won't work. Too many closed ecosystems.
Internet gaming cafe model? Won't work. Go to a mall to play a video game? This isn't 1985.
Game developer? Starting from scratch with zero expertise?
Intellectual property license resale brokerage? Against the interest of external stakeholders who can torpedo any such plan.
Subscription service for online gaming? Maybe, but even Netflix eventually had to start producing their own content b/c content owners asked for so much.
If Cohen comes out and says phase 1 is to re-create Ebay for old disc games, or comes up with some plan that requires the cooperation of external entities against their best interests, the stock will die. It all comes down to one's assessment of whether Cohen is a genius or an egomaniac intent on reinventing the wheel and claiming credit for it.
I doubt anyone stands in his way, since he's the largest shareholder (13%), with most others being index funds (Fidelity, Vanguard, iShares, etc).
https://news.gamestop.com/stock-information/institutional-ownershipI'm also curious about his plan for GameStop:
"But now Cohen has to deliver. The company is seeking a new chief executive officer, with the goal of going head-to-head with Amazon.com Inc. and other e-commerce sites. And Cohen looks to forge new partnerships with video-game publishers and tech giants, potentially increasing the number of services GameStop can offer online."
https://news.yahoo.com/gamestop-turnaround-artist-ryan-cohen-110014940.htmlAt Chewy he focused on customer service and selection. But with computer games, a specific game is only available from one company. So selection requires he establish relationships with companies that already have their own platforms for online sales.
I expect 0% market share in smart phone gaming. Google and Apple are not sharing their respective monopolies, and will warn users against possible viruses from third party stores/websites.
Consoles from Nintendo and Microsoft presumably have their own store built into the console, and also their own online store. Right now they view GameStop as a way to make additional money from people who like to buy games in retail stores. As GameStop mostly/totally closes those stores, they turn from partner to competitor. Nintendo and Microsoft will see a drop in retail sales, and then the cause of that loss will ask for their help competing with them. I don't expect that to work out well.
Steam, gog.com (Good Old Games) and Amazon have all been doing online game sales for years. Someone with a library of steam games will want to buy their next game on steam, to have everything conveniently in one place. Same with Good Old Games and their library. Although Amazon is last in that list, they are planning a big push, which will probably crowd out GameStop's entry into the market.
If GameStop manages to have some new games, why won't people just keep buying games at Steam / gog / Amazon? Why split their library between a hundred games on steam, and buying a new game on GameStop? There is a real switching cost to those who built up libraries at existing websites, and I think that will translate to customers who are reluctant to switch. Pet owners don't have to do anything to switch, so I think it will come as a surprise to outsiders trying to compete in the gaming industry.
Having reviewed my bear positions, I actually think GameStop is in my top 5. But it might take longer for people to see that GameStop's long term prospects are bleaker than expected.
@arebelspy - Serious question - If GameStop does nothing, how long will you be enthusiastic about the stock? If Ryan Cohen announces interesting things, but there's no money coming in or no customers, what is your time frame?
I guess I should do more research than just asking one person, but it's a start! :)