research report · GME

GameStop Corp.

Johannes Vermeer, Woman Holding a Balance, c. 1664, detail · National Gallery of Art

Viridis’s deep research report, written Oct 31, 2026 from its quarterly report (10-Q for the quarter ended Aug 1, 2026, filed Sep 9, 2026). Written and checked with Anthropic’s Claude models.

your email, no card; what you get

business trajectory

Improving

better on balance: sales, margins, cash or competitive position

financial resilience

Strong

can meet its obligations and fund its plan for two years with money it can count on, with room

Judgments of the business from its filings, not of its shares: no valuation, no advice.

bottom line

GameStop's stores are more profitable than they have been in years. Second-quarter operating income was $160.2M on a 43.7% gross margin, led by trading cards, even though sales fell 18.7%. The stores no longer decide the results, though. On August 1 the largest asset was a 9.8% eBay stake worth $4.9B, bought with cash that had fallen to $5.06B from $9.01B, alongside a non-binding bid for the rest of eBay with no financing shown. Debt is well covered by cash; shareholders bear the cost instead, with shares outstanding up 12.7% in a year.

what changed this quarter

  • Second quarter of fiscal 2026 (13 weeks to August 1, 2026):
  • Sales were $790.2M against $972.2M a year earlier.
  • Collectibles rose 56.5% to $356.3M.
  • Video games fell 46.8% against the prior-year Nintendo Switch 2 launch.
  • Gross margin was 43.7% against 29.1%, and operating income $160.2M against $66.4M. Net income was $298.7M, including about $238M of net eBay gains and a $75.0M bitcoin loss.
  • The fiscal 2026 outlook for adjusted EBITDA was raised to more than $650M, from more than $600M set on June 26. Adjusted EBITDA is profit before interest, taxes, depreciation, stock pay and investment gains or losses.
  • On July 15 GameStop exercised its eBay options for $3,955.2M in cash. France was sold during the quarter.
  • On September 3, $1.4B of convertible notes were exchanged for about 55.5M shares plus about $358.4M in cash. That left debt at about $2.8B and shares outstanding at 504.5M.

in the full report

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

  • A shift to trading cards and lower costs more than doubled store profit on shrinking sales
  • Since July the balance sheet has been a concentrated bet on eBay
  • Debt is falling, but shareholders pay in dilution

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

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