The Death of GameStop

So this is finally it.  We are witnessing the demise of the often beloved (or despised, depending on the person you talk to) company GameStop in real time.  And what a wild ride it has been so far.  The latest salvo of information comes from the now very beloved former GameStop manager, turned YouTuber and unapologetic GameStop-information leaker Cody (aka @CAMELOT331):

Here it is. The shocking news you've been waiting for. You will not believe what is happening next.

It truly is Game over. https://t.co/WY6WmWWa55

— CAMELOT331 (@CAMELOT331) September 4, 2019

The video proceeds to lay out in detail the final of GameStop's multi-tiered Phase program that the company is implementing in order to attempt to resuscitate it's failing business model.  This is known as "Phase 3," a conclusive shuttering of 2400 stores (down from 4,400~) across the nation in order to consolidate down expenses and start anew with a fresh vision after Q4 concludes.  This will also be a plan that will cut and eliminate all stores that have been consistently under performing for a long period of time.

This vision hinges on the idea that a few of what stores that remain will be transitioned into retro gaming themed and tabletop gaming stores.  This leak of information actually falls in line with GameStop's most recent Trade-In Promotion that they ran for the majority of August -- I personally felt that the very promotion was actually targeted at acquiring a large swath of retro games for these retro gaming themed stores that they have planned.  This also coincides with the report that Gamespot dropped in July detailing a plan to re-image a few stores into retro gaming themed stores.

Upon being told this Phase 3 information, many of the district managers that attended the annual managers conference were directed to begin the procedure of listing out each and every manager and associate that they "desire to keep" and are "talented enough" to stay beyond the Q4 season.  This of course left a large portion of these managers visibly distressed, as it cannot be easy to go back to their districts and begin the slash-and-burn approach of their own troops in order to "save the company."

For people who assume that this information might be a load of bull and cannot be trusted, CAMELOT331 has a now very famous, very public back and forth on-going feud with the embattled company, after being fired by said company in July 2019 after 11 years of employment as a leading store manager.  In the months that continued after, Camelot gained not only a massive swell of new YouTube subscribers due to his firing and subsequent GameStop rants and warnings, but also a number of people currently (and formerly) employed by the company, eager to leak any secrets or insider information they could get their hands on.  Because of this, one can assume that this Phase information can be considered to have been leaked bu someone very high up in the company, if not a member of the board of directors or someone in a position that can't easily be removed.  Camelot was able to publicly leak information on the initial round of lay-offs of regional managers in August, as well as the lay-offs of 100 corporate officials (and subsequently the lay-offs of half of the employees at GameStop's publication Game Informer), days and weeks ahead of the public announcement and subsequent coverage by major online publications.  These moves that are now considered Phase 1 & Phase 2.

Since Phase 3 is a major final step of GameStop's plan to consolidate resources, I think it's important to shine a light on exactly why this is happening and who benefits.  This in my opinion is purely a corporate move in order to pump up the stock to a specific amount, then sell out completely as soon as it reaches an appropriate zenith.  Cutting more than half off the corporate offices and then subsequently shuttering more than half of the stores will look very good on the books for investors as a major play to rally the stock back from it's abysmal numbers for a short while, along with the speculation that the company might be able to hold on until the PS5 and new XBOX console hits store shelves.  Over the last year and a half, the company has floundered left and right, and many different problems and issues came about:

1) GameStop's new CEO Resigned After 3 Months
2) GameStop Fails to Secure a Buyer
3) ThinkGeek Subsidiary Shuts Down
4) GameStop Teams Up with R/GA to Plan Store Redesign
5) GameStop Redesigns Website
6) Michael Burry Buys Into GameStop Stock

With this now tabled Phase 3 that will execute on or after Q4, there actually might be a small window for GameStop to not only start to buy back their own stock, but for investors to also buy shares as the value rises to the point where the company partners can dump their shares and bounce, leaving investors with the bag and bouncing as the company finally dies a very sad and pathetic death, similar to Blockbuster.  Alternatively, the idea that Mr. Burry bought into GameStop shows that he's actually mirroring the much more successful investor Carl Icahn and his mistake in buying into Blockbuster shares in 2004 in order to influence corporate decisions and make a bit of money on the possible share price increase.  Soon he too will learn the unrelenting match that is digital distribution.

If you are a current employee of this company, it might be a good time to have a back up plan in case you get axed after Black Friday and the subsequent holiday season.  Enjoy the ride in real time if you are an onlooker and dislike (or like) this company.  Or not.  Either way, this is the death of GameStop.