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HAPPY NEW YEAR FRIENDS! 
To start off 2021, I’m going to debunk the popular myth that GameStop is the next Blockbuster.
CC: @jimcramer $GME
To start off 2021, I’m going to debunk the popular myth that GameStop is the next Blockbuster.
CC: @jimcramer $GME
1/ We know Blockbuster was Carl Icahn’s worst ever investment after being disrupted by $NFLX but what actually happened?
Blockbuster was working on a digital pivot, but instead doubled down on Brick and Mortar and shelved their online platform.
Blockbuster was working on a digital pivot, but instead doubled down on Brick and Mortar and shelved their online platform.
3/ Unlike $GME 20% of Blockbuster was franchisees who threatened to sue Blockbuster and actively fought against digital adoption because it would render their B&M locations obsolete. Blockbuster could have crushed Netflix, but the new CEO knew retail and “wasn’t a digital guy.”
4/ Which brings us to $GME mgmt Sherman and Bell, who are retail veterans, and have done an excellent job cutting costs and closing B&M locations (closures have been misinterpreted as a sign of impending bankruptcy).
5/ To their credit, Sherman and Bell have focused on e-commerce as the future of GameStop’s business, but the problem is they don’t have a tangible plan, they just keep repeating “omni-channel.”
6/ Enter RC Ventures (who now owns 13% of $GME), famous for $CHWY - one of the few online retailers that managed to compete with $AMZN.
Unlike Icahn, Cohen is solely focused on “digital experiences” as he made clear in his demand-for-a-plan letter to GameStop’s board.
Unlike Icahn, Cohen is solely focused on “digital experiences” as he made clear in his demand-for-a-plan letter to GameStop’s board.
7/ I believe Cohen sees the 55 million power up rewards members and 7.5 million Game Informer paid monthly subscribers as the primary source of value in $GME - two points I’ve yet to hear discussed by @CNBC @jimcramer or anyone pushing the “Blockbuster 2.0” narrative.
8/ To further debunk the “Blockbuster 2.0” myth, I’d like to pose a question: Who is the Netflix of video games?
Is it Steam? GamePass? PSN?
Streaming video games, especially multi-player games across households is much more complex than most realize. Ask Phil Spencer.
Is it Steam? GamePass? PSN?
Streaming video games, especially multi-player games across households is much more complex than most realize. Ask Phil Spencer.
9/ Big problem for $GME is their highest-margin revenue (the bread and butter) is pre-owned, and as gaming becomes digital, that will cease to exist. But unlike Blockbuster, $GME is actively trying to pivot to a digital model, not doubling down on Brick & Mortar. (See $MSFT deal)
10/ Does this mean they’ll be successful? I have no idea. But w/ console tailwinds into 2021 and beyond, there’s a lot of optionality. ($GME Market cap is $1.3b, P/S 0.05). An uphill battle, but clearly Ryan Cohen is confident he’s up for the task. https://twitter.com/ryancohen/status/1344506458235404289?s=21
11/ For better or worse, fundamentals have left the building. Current market is all story. As @RodAlzmann and @DOMOcapital have noted, $GME will present as a “Technology” company at the ICR conference. https://twitter.com/rodalzmann/status/1342915190283710465?s=21
12/ Is that ridiculous? Maybe, but no more ridiculous than a Cybertruck, or the FSD robotaxi you were supposed to have in 2019.
Maybe $GME will announce they are the Netflix of gaming. As long as it sounds plausible it will add value in this market.
Maybe $GME will announce they are the Netflix of gaming. As long as it sounds plausible it will add value in this market.
