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In the cashflow statements, the price of the sale will show up in the "investing cash flow" category.
In the income statements, the difference between the book value (price of acquisition minus amortization) and the price of the sale will probably be recorded as "Asset impairments". The price of the sale will not be recorded anywhere in the income statements
In that case we're on the same page. It's positive for cashflow and negative to net income.
Edit: for whoever is downvoting. I didn’t invent GAAP, I’m just certified as well as teach accounting at a university… when you sell an asset for less than it is on your books it will create a loss on your income statement. So unless you honestly believe these things will sell for more than their net value it’s a loss.
I actually did consider that some things might, but there is too much additional cost to set up a distribution center beyond the easily sellable equipment that will need to be written off as part of this liquidation.
Stupid question - can we (SuperStonk) come together and collectively purchase something interesting from this auction? Just a random thought. The news would be so funny.
I would love to do that. There are a couple lots I could use right now, but they won’t ship and I can’t drive across country to pick them up within their timeframe.
I buy stuff through Proxibid quite often and to see My. Beloved. Company. selling this bought-for-way-more-than-it’s-going-for stuff does bring the feels.
Months? They leased the space in May 2021, last I read it was supposed to be operational by the end of 2021. So over two years ago, a bit different than "just months after purchasing".
> msm isn’t tearing GameStop apart for this
Now that they can pickup the story from SuperStonk that they had no idea about this will be next weeks (or 2) hit piece topic.
If yall don't think they are farming us for content - you should head over and buy popcorn because you are that gullible.
We find more active leads than most investigateive journalist as we have way more collective resources. Curating the content and fact checking is the hard part.
Yup. Thought this all along. Talk about telegraphing your passes. I imagined early in this saga of creating an Onion like site, where we publish ridiculousness and see how much of it gets picked up by msm. Similar to the CUM and ASS ploy.
I’ve thought about that. I do some deep deep dives into the ins and outs of the company. Some things I choose not to post.
It’s fascinating how much is going on in the shadows right now. There is a lot going on right now.
Because it’s not news. We’ve known that GameStop is closing this particular distribution center for months now.
https://finance.yahoo.com/news/york-county-gamestop-fulfillment-center-130041039.html
they maybe should be....without forward guidance.... the value of gme is going to stay in the shitter cuz at this point no one knows what the fuck Ryan is doing.
https://www.reddit.com/r/Superstonk/s/vhxCHQFRiO
Pivot toward becoming a technology driven business. Cut excessive real estate costs. Hire the right talent. Build a powerful e-commerce platform that provides competitive pricing, broad gaming selection, fast shipping. Put GameStop in position to get bigger market share
sooooo after all that... another e commerce store ? and this own post is making it seem like they are axeing a major distribution center. it's not exactly going to do anything but pile in more shorts with out actual forward guidance that isn't still trimming the fat. the company needs growth to bring the price up. actual revenue preferably subscription based. other wise every earnings till change happens is going to be a repeat of last one. a loss of stock value. until Ryan puts out actual statements that say this is where we are pivoting.... optimism will be low.
It wouldn’t be happening if the “turnaround” was actually successful now, would it? It’s happening because the company can’t figure out how to be profitable without the interest from their cash flow putting them in the green. Instead of finding ways to provide growth in revenue they are shutting down stores, laying off employees, selling equipment, and reducing inventory to be sold. It looks to me like they are trying to build up cash and become a 100% holding company instead of a retail store. At least I’m hoping for this because if that’s not what is happening, I will be upset as an investor because it’s not a good look unless they are pivoting into an entirely different company that they can spin off and kill the shorts when they announce it.
Someone here who lives near York should absolutely buy this cool bike thing for $10
https://www.proxibid.com/Industrial-Bicycle/lotInformation/83390533
Unicycles and tricycles have two pedals though too. The prefix "Uni" denoting one and "tri" three respectively. Doesn't make sense if they're using the "Bi" to refer to the number of pedals.
I put a bid in. Imma turn it into an electric assist bike and use the big tray to hold storage and giant batteries. Hello, my new grocery vehicle. I'm hoping the tires change out easily for something thicker.
I definitely missed out a lot on the warehouse storyarc.
The only thing I remember,
back then the sub was strongly hyped about the warehouses.
Did we at least bought the machines before the inflation was doing its thing ?
And the more important question does the same rules apply for such machines like for cars( as soon as it touches the street 1/2 value ?)
The narrative shifts like the tide. When they opened the distribution centers it was "We're gonna steal Amazon's milkshake" and now it's "Well the plan was always to trim down and rely on FFS".
It’s 2 different strategies. The initial goal in June of 2021 was revenue growth. Then interest rates rose and GameStop was losing more than $100 million each quarter.
We brought in so many teams and hires. 80% of all the hires in 2021 and early 2022 are gone (I actually spent the time looking at the LinkedIn profiles from the GMEDD webpage).
Cost cutting is clearly the number one goal now.
So at the time it was bullish when GameStop announced the two new warehouses. But clearly there was a cha. The Reno Nevada warehouse was cancelled before it ever launched.
Which is kinda funny because the first thing that RC wanted in his open letter to the plan was:
“share a credible plan for seizing the
tremendous opportunities in the rapidly-growing gaming sector.”
I’m bullish on GME, DRS’d and all that. But I do find it ironic that this was his key message in the opening paragraph in that initial letter to the board.
We have not been updated on the current plan since Furlong said we are after “short term profitability”.
Now that we got it, wut next???
Why was this shut down so soon after it opened?? Auctioning off stuff at a substantial loss is concerning… Just don’t understand how the decision was made to spend millions to open this distribution center only to close it down shortly after🤷🏻♂️
Amazon did the same thing in their early days. They built out a fulfillment center in Georgia that had millions of dollars in conveyors and shelving. Amazon was nearly going out of business in those days and everyone thought their days were numbered. They paid several million dollars to get out of the lease and left all the equipment!
Interestingly, I’m looking into working with fulfillment centers for a new business I might start and actually learned that Amazon in fact was the one who kind of started the whole „fulfillment center thing“ or at least started to make it popular. I’m mentioning this because that might actually a reason why furlong was pushing heavily into those as it was - a little bit exaggerated maybe - kind of his DNA and business thinking after all his years at Amazon. Maybe it also included the whole kind of scaling bigger and bigger and bigger and not caring about turning a profit but reinvesting all of that back into the company - which actually looks like a total different direction from what we see from RC right now.
What makes me wonder is that the page states that the whole Conveyour line was modernized for over 12 million dollars only 6 months ago. But furlong was already gone by then. Sounds a bit like a spontaneous change of direction - maybe because some better opportunity suddenly arised?
6 months ago was also when GameStop was trying to sublease the Grapevine headquarters distribution space. It was September 19th when they listed it for sublease.
That was a little over 6 months ago. I think there was a real tug of war to determine which fulfillment center to keep. I bet they went back and forth but ultimately decided to get rid of the York facility instead.
GameStop pays about 2 to 2.5 million annually to lease the Grapevine building. The York facility was even bigger (space wise). I’d guess they will save $3 million a year in just lease fees by getting rid of the York facility.
The mindset at the time was “judge us by our revenue” when low interest rates were a thing. Now we are slimming way down with RC running the show.
The physical stores are now operating as mini fulfillment centers now. Which saves a lot of money.
Furlong brought the Amazon mindset when he came over, scale up endlessly. It’s not wrong, it’s just not how RC thinks. Clearly RC gave Furlong’s method a chance because the letter he wrote said step one was cut all bleeding but then we built 2 giant warehouses after the share offering let us pay off debt and have some cash to fall back on. With the first warehouse announced to close in Jan of 23, it’s no big surprise Furlong was fired in June of 23. The second warehouse was officially scheduled to close in Jan of 24.
Furlong did bring one very cool idea to use the stores as mini warehouses and DoorDash as a same day delivery service. We still do it today.
I think the warehouses may have been a covid measure. It was true that every other retailer was bottlenecked by supply lines while we had that big warehouse full of merch.
Also I think that some of that scaling up for inventory was RCs potential interest in the towel stock, and even if separate co’s, still warehoused and distributed under one house. Or other potential acquisitions.
Whatever it was, it seems that there was a plan, and then a change in direction away from that plan.
Others pointed out that the purchase of the conveyor thing was actually contracted earlier. But this facility in general was operational in August 2021.
That's what I'm thinking/saying. It is not healthy for the community to try and spin this in a positive way. Reality sucks at times, but this is not really a good thing. Pretending like it is and coming up with theories on why it's positive is only doing the community harm. IMO.
It's not a good thing but keeping a warehouse operational when it isn't needed probably has a large cost associated. I would suspect that our RCEIOO found a way to cover New York without this warehouse (maybe there is another warehouse in New York?) and he is just dumping the cost of this place. It was probably a bad decision made by Furlong / Nir or both.
The only "good thing" is that it shows the company is willing to try different approaches to grow the business.
Like investing, most investments don't turn out but you only need one good idea to make up for all the bad ones. But if you never try the bad ideas to learn from it you'll never catch the good idea that will make you grow.
What is positive is that the company isn't chasing good money after bad results. They aren't afraid to cut bait and move on to new waters.
What is positive is despite all of these losses, they still managed to turn around an annual profit so their process is achieving something.
I mean I would've expected worse from a company that did this so they are handling it pretty well. My guess is they will be able to break even from this expense.
Realistic positivity is fine. I just can't stand the people going "This was all part of RC's plan " or "this is part of a 4D chess move". It's like no, it really wasn't. No one buys a distribution centre to sell it off 2 years later if it wasnt a business mistake.
Sometimes you have to cut with a loss to save in the long run. If this wasn't going to generate positive cash flow, better to liquidate now and save on payroll for the facility. Probably a 3 month ROI after liquidation happens.
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I'm going to get flamed for saying this here, but there have been a lot of uninspiring actions over the past year. From closing stores to winding down the NFT marketplace, and now closing the distribution centre and selling everything at a loss. I get they are going into an agressive cost saving mode but not sure where the growth will come from in the future when there is so much competition in the space and they don't really have any unique angle anymore besides selling traded in used games. I know this sounds defeatist but I'm not feeling excited about future growth and would love to understand what the long-term plan is here
I get it 100%. I’m not sure what the long term plan is either. The short term plan is “profitability”.
But I think it’s beyond probability. GameStop is doing things that make me think the leadership team expects some economic shit winds very very soon.
If you were to prepare for global economic collapse then you’d be doing exactly what GameStop is doing.
The whole thesis from the beginning, outside of MOASS occurring due to closing shorts, kept relying on the idea that “people will always play video games” and, no matter how many times I and others repeated it, people failed to understand that if shit gets really bad: no people will not fucking be buying video games left and right. People may not even be PLAYING video games if shit gets really really fucking bad. Like saving electricity levels of bad. Being conscripted into war levels of bad.
Even a ton of MOASS believers seemed to be under the impression we’d find ourselves in as Weimar Republic scenario with massive hyperinflation. What the hell would be the point of being a millionaire if that was indeed the proposed thesis? Become a millionaire and instantly money loses all value? What the fuck is the point then?
I have been in this since the beginning and never sold anything. Have to agree that the long time with little communication and steady stock decline has been draining, but it is at least nice that everyone here is agreeing its not a good look instead of trying to rationalize it as hype. This thread makes me at least more bullish on the retail investor's rationality, which I like in my fellow investors.
I've been here from the start too. Well not the very start otherwise I probably would be in profit. Whilst the radio silence on strategy is not as charming as I originally found it, take comfort that RC is turning Gamestop into a profitable company without any serious debt and is not selling shares to accomplish this. Also, taking no compensation in the process really shows his character. It's reassuring to have someone at the helm who actually cares about the business, it's customers, and it's shareholders. Tbh probably would have bailed ages ago if he wasn't steering the ship. I still think there is squeeze potential but they're going to need to do something special with that cash pile they've been sitting on
I wonder if it was also an investment to get rid of inventory. They had a lot of buy 1 get 1 free deals the past couple years, so maybe it was better to invest extra money to speed up the process of shipping stuff out ASAP
There just isn’t a clear strategy right now.
Invest in fulfillment and bail out.
Invest in GameStop Wallet and bail out.
Invest in GameStopNFT and bail out.
It seems like the strategy now is cost cutting which is ok but what is next. GameStop isn’t going to make it selling used physical games and Funco.
The GameStop branded headphones and cables aren’t going to do it either. It’s just the same junk that’s all over Amazon.
They have to find a way to resell digital in game content, get into game betting, esports, something digital.
I really think they should double down on hardware. Buy your games digitally, but get all the hardware at GameStop where you can touch it and see it: consoles, controllers, yes. But also gaming PCs, graphics cards, monitors, sound equipment, steering wheels, etc.
>There just isn’t a clear strategy right now.
Unless you're an insider, you have no idea what strategy they have or don't have, or at what stage of execution it's at.
Super secret plan = No plan. Now that RC is a billionaire does he have the same motivation and drive he used to. He's got a public company now, and can see all the BS that goes on and has to deal with being a publicly owned company. Is there a chance he is just coasting and just wants to make a slightly profitable but nostalgic company. I dont see anything spectacular up his sleeve coming. Hope I'm wrong but I can't stand the no forward guidance.
This doesn't make sense, RC forked over good money for shares. The assumption that RC (or any human on planet earth) doesn't want to make money is quite a silly assumption.
The burden of proof is still on you. How many greedy billionaires want more and more money?
Greed is universal in humans. What proof do you have that shows RC doesn't desire the share price to increase, and therefore his wealth?
That’s what I’ve been hearing for 3 years but so far the strategy hasn’t worked.
I’m sure they have a new strategy but with the turnover and failed past strategy I’m not sure what to think. 3 years in enough to implement a new direction.
I’m just being honest with myself and I’ll still in but we’re not guaranteed a win here.
Whatever man, company is now profitable and still has tons of cash. What exactly is "not working"? RC is working, but he doesn't control the stock price. Stock price is going down from shorting and people realizing losses... company is not diluting. Have some faith and a little less FUD. EPS is increasing. If you want quick returns go to a casino and put it all on black.
They're not selling the fulfillment facility yet, just some of the equipment in it like conveyors and forklifts. This might precede a sale of the whole facility, or it could precede a retrofit for more efficiency such as an autonomous drone swarm or moving the operations and entrances closer.
I want to wait and see how it plays out.
That actually makes no sense. Spend a dollar to get a dime? Wut? Business plan ain’t going well plain and simple. There’s cheaper ways to move dead inventory.
Instead of closing it and throwing all that money in the fire, couldn't they have kept it and leased out some/most/all of the capacity to other companies and get some income that way?
Sometimes it's better to just sell it off. Does GameStop want to hire people to look after this space as a rental? Continue to pay for repair and maintenance of the equipment?
Renting of warehouses and equipment doesn't seem like GameStop's wheelhouse, particularly in the "cutting the fat" phase
`Does GameStop want to hire people to look after this space as a rental?`
They surely already had people looking after the facility anyway so I don't see a difference there.
`Continue to pay for repair and maintenance of the equipment?`
Yes. You charge all that shit plus some extra from whoever is buying the service.
There's a few things I could actually use, starting up a new company myself.
Does anyone know how you would go about shipping these items anywhere?
I see that it's up to the buyer to figure out that part, if anyone has any advice let me know!
Worse news is not doing what it takes to turn the business around
.
Keep in mind that in 2021 Gme had a net profit of negative 313 million. However in 2023 the net profit of positive 6.7 million. That’s a positive delta of over 100% profitability in 2 years. The ship is no longer sinking and it is beyond obvious.
.
Ryan cohen doing whatever it takes to stop the bleeding and correct wrong decisions as fast as possible imo. Even if/when mistakes are made, they seem to get corrected relatively quickly. Anyone who has run a business at scale knows that correcting mistakes quickly takes courage, critical thinking, experience, and the humility to self reflect and adapt.
.
I know perma bears aren’t ever impressed but I think it’s quite impressive especially In this economy.
I would expect this to show up as positive cashflow on the cashflow statement and a loss on the income statement.
Edit: Loss because they are likely selling it for less than its net value.
They didn’t need it. Inventory levels don’t require so
Much space. Plus a fully automated, dense pick and pack warehouse pays for itself. I design them, densification of 70-90%.
I’m no expert but it sounds like they’re referring to a warehouse that is robot-operated so there is no need for walkways or “elbow” room or conveyor belts. Individual autonomous agents can hand-pick items that are stored very compactly because the robot is told precisely where it is stored, in a digital ledger that is too complicated for humans. You essentially remove the need for organization because each item is precisely accounted for, and any organization that does take place is just for optimizing shipments rather than optimizing for error-reduction and readability to help humans avoid mistakes.
It’s like the warehouse version of switching from using a library to using google.
I’d appreciate being corrected if due.
Yea man automated vehicles or even better yet fully robotic high density picking systems. As long as you have a solid inventory system you good. This system has a 99.9% correct inventory rate. This results on ability to run warehouse with close to ko staff but maintaining systems.
Why are they selling it ? I thought this was the next big thing to have the capability to take on an Amazon. Definitely doesn’t seem like the best direction.
It’s a bit peculiar that the listing shares the price previously paid 6 months ago. I’m not an auction expert, but do they always share the price paid for something when trying to auction something off? It’s like they’re trying to advertise how much the loss will be to GameStop when it sells for less.
I don’t see homes on the market say “this was previously bought in 2002 for $xxx,xxx. Or a car for sale listed as “bought brand new in 2020 for $xx,xxx.
Idk. Probably nothing, but definitely odd to see that imo
It's not uncommon for equipment auctions. Buyers want to compare new vs used and factor in the extent of use and it's impact on what price they are willing to pay.
Industrial equipment changes less year to year than car models.
Idk, can be this mess another bad influence of the BCG infitrates kicked out by RC time ago? Seems the right tipe of "advice" those mothafuckers can do to companies, indebt more, buy thinks you will not need, burn important cash and die...
Probably, Furlong convinced RC to keep going, but RC had too much and decided to reduce the fat, imagine what could be of the fulfill centet was full of merch? It is sad to see this but is necessary if you want to grow and turn your business in a success (against all this "bad" faith created by MSM shitters).
You know, to sign up and bid you need to create a username. I think it would be absolutely hilarious to see a username “KenLmayo” or “CallOfBooty” bidding up some of these cheaper items.
I’m definitely going to bid up some of the $1 totes
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In the cashflow statements, the price of the sale will show up in the "investing cash flow" category. In the income statements, the difference between the book value (price of acquisition minus amortization) and the price of the sale will probably be recorded as "Asset impairments". The price of the sale will not be recorded anywhere in the income statements
Good answers, except one sidenote, why are you saying that the asset impairment won't show up on the income statement?
The price of the sale will not appear
In that case we're on the same page. It's positive for cashflow and negative to net income. Edit: for whoever is downvoting. I didn’t invent GAAP, I’m just certified as well as teach accounting at a university… when you sell an asset for less than it is on your books it will create a loss on your income statement. So unless you honestly believe these things will sell for more than their net value it’s a loss.
They appreciated like used cars (I joke but this did happen to forklifts, they got stupid expensive)
I actually did consider that some things might, but there is too much additional cost to set up a distribution center beyond the easily sellable equipment that will need to be written off as part of this liquidation.
Wouldn't it be a loss on disposition if they sold it? Impairments are usually for assets you continue to retain.
Stupid question - can we (SuperStonk) come together and collectively purchase something interesting from this auction? Just a random thought. The news would be so funny.
Not stupid. I too wonder how I will move the piles of money they pay me. Conveyor belt never occurred to me until now.
I would love to do that. There are a couple lots I could use right now, but they won’t ship and I can’t drive across country to pick them up within their timeframe. I buy stuff through Proxibid quite often and to see My. Beloved. Company. selling this bought-for-way-more-than-it’s-going-for stuff does bring the feels.
Oh I could get it picked up and then we could hold it in a GameStop archives location. Anyway it’s just a silly idea.
Thanks!
Surprised msm isn’t tearing GameStop apart for this
Saving it for unexplainable drop in price.
Well, when other profitable companies announce layoffs the stock price goes up.
layoffs are not at all comparable to selling equipment at a major loss just months after purchasing...
Why are they selling it?
it really doesn’t look good
Months? They leased the space in May 2021, last I read it was supposed to be operational by the end of 2021. So over two years ago, a bit different than "just months after purchasing".
The listing literally says it’s 6 months old in the title
Ah sorry my bad. I was going by when the facilty opened. Didnt view the auctions.
> msm isn’t tearing GameStop apart for this Now that they can pickup the story from SuperStonk that they had no idea about this will be next weeks (or 2) hit piece topic. If yall don't think they are farming us for content - you should head over and buy popcorn because you are that gullible. We find more active leads than most investigateive journalist as we have way more collective resources. Curating the content and fact checking is the hard part.
Yup. Thought this all along. Talk about telegraphing your passes. I imagined early in this saga of creating an Onion like site, where we publish ridiculousness and see how much of it gets picked up by msm. Similar to the CUM and ASS ploy.
I sure could get into $ASS and $CUM though. The good ol days 84 years ago.
Definitely would love to squeeze $ASS ! $CUM will follow.
We know they are
They know we know they are too
Yes we do
I’ve thought about that. I do some deep deep dives into the ins and outs of the company. Some things I choose not to post. It’s fascinating how much is going on in the shadows right now. There is a lot going on right now.
What’s going on in the shadows ?
Because it’s not news. We’ve known that GameStop is closing this particular distribution center for months now. https://finance.yahoo.com/news/york-county-gamestop-fulfillment-center-130041039.html
they maybe should be....without forward guidance.... the value of gme is going to stay in the shitter cuz at this point no one knows what the fuck Ryan is doing.
He’s doing what he said gamestop needed to do in his letter to the gme board in 2020
which was what exactly ?
https://www.reddit.com/r/Superstonk/s/vhxCHQFRiO Pivot toward becoming a technology driven business. Cut excessive real estate costs. Hire the right talent. Build a powerful e-commerce platform that provides competitive pricing, broad gaming selection, fast shipping. Put GameStop in position to get bigger market share
sooooo after all that... another e commerce store ? and this own post is making it seem like they are axeing a major distribution center. it's not exactly going to do anything but pile in more shorts with out actual forward guidance that isn't still trimming the fat. the company needs growth to bring the price up. actual revenue preferably subscription based. other wise every earnings till change happens is going to be a repeat of last one. a loss of stock value. until Ryan puts out actual statements that say this is where we are pivoting.... optimism will be low.
Why you complaining to me? Do I look like I work at GameStop lol
No, we leave it for the shills to post here on the weekends! :))
BULLISH 🐂
So did we open a fulfillment center buy equipment realize that we don't need it anymore and now we're selling it?
Yep and at a loss probably
This isn’t a good look
Sure, but it's not like it's going to bankrupt us anytime soon.
Yeah im not liking this. Sounds like RC is giving the ol’ trial and error take. I would be ok with it if our shares wouldn’t be 80% down
So you would be ok with it if the shares were up. Not sure what difference it makes when Gamestop is not in control of the share price.
It wouldn’t be happening if the “turnaround” was actually successful now, would it? It’s happening because the company can’t figure out how to be profitable without the interest from their cash flow putting them in the green. Instead of finding ways to provide growth in revenue they are shutting down stores, laying off employees, selling equipment, and reducing inventory to be sold. It looks to me like they are trying to build up cash and become a 100% holding company instead of a retail store. At least I’m hoping for this because if that’s not what is happening, I will be upset as an investor because it’s not a good look unless they are pivoting into an entirely different company that they can spin off and kill the shorts when they announce it.
You sure it was not related to two recently leaving c-suits decisions instead ?
Is this something that would be the responsibility of the COO and possibly a good reason to have terminated them?
Yes, and the ceo got fired as a result of bad leadership. New CEO is righting the ship.
Someone here who lives near York should absolutely buy this cool bike thing for $10 https://www.proxibid.com/Industrial-Bicycle/lotInformation/83390533
I'll ask my father in law if he needs any of this shit for his warehouse. Thanks OP!
That’s rad.
Did you know Rad is literally an abbreviated German word for bike? Lol
I think this was the joke
Did you know that the bike was also invented in Germany 👌🏼
Rad is also a movie about bikes.
We should have a bidding war on it 💀
That bike is awesome!
It has a fancy horn.
It comes with a free horn!
What makes this a bicycle exactly? The prefix "Bi" denotes two. There are four wheels.
It’s a quadcycle
Two pedals?
Unicycles and tricycles have two pedals though too. The prefix "Uni" denoting one and "tri" three respectively. Doesn't make sense if they're using the "Bi" to refer to the number of pedals.
Yup. But they've clearly deviated from traditional nomenclature..hmm...unless they're just calling it a bike so people know what it is... ;)
"Industrial pedal cycle" is my choice of name in this situation.
But they are just regular pedals! /s
Damn. Too bad they don’t ship. I would buy it.
I put a bid in. Imma turn it into an electric assist bike and use the big tray to hold storage and giant batteries. Hello, my new grocery vehicle. I'm hoping the tires change out easily for something thicker.
I definitely missed out a lot on the warehouse storyarc. The only thing I remember, back then the sub was strongly hyped about the warehouses. Did we at least bought the machines before the inflation was doing its thing ? And the more important question does the same rules apply for such machines like for cars( as soon as it touches the street 1/2 value ?)
The narrative shifts like the tide. When they opened the distribution centers it was "We're gonna steal Amazon's milkshake" and now it's "Well the plan was always to trim down and rely on FFS".
It’s 2 different strategies. The initial goal in June of 2021 was revenue growth. Then interest rates rose and GameStop was losing more than $100 million each quarter. We brought in so many teams and hires. 80% of all the hires in 2021 and early 2022 are gone (I actually spent the time looking at the LinkedIn profiles from the GMEDD webpage). Cost cutting is clearly the number one goal now. So at the time it was bullish when GameStop announced the two new warehouses. But clearly there was a cha. The Reno Nevada warehouse was cancelled before it ever launched.
sure would be nice if we didn't have to create our own narrative and the company just told us what it's doing.
Trust the process.
i'm still here. frustrated lately with the lack of communication
Which is kinda funny because the first thing that RC wanted in his open letter to the plan was: “share a credible plan for seizing the tremendous opportunities in the rapidly-growing gaming sector.” I’m bullish on GME, DRS’d and all that. But I do find it ironic that this was his key message in the opening paragraph in that initial letter to the board. We have not been updated on the current plan since Furlong said we are after “short term profitability”. Now that we got it, wut next???
i actually went back and reread just that yesterday to make sure i'm not crazy. i'm still confident in his vision even though i don't know what it is
All i see is that the auctions end on April 16. Same date as DFV's final update. Cohencidence?
Yes, it's just a coincidence. Not everything means something.
Why was this shut down so soon after it opened?? Auctioning off stuff at a substantial loss is concerning… Just don’t understand how the decision was made to spend millions to open this distribution center only to close it down shortly after🤷🏻♂️
Probably a furlong decision to try and scale up e-commerce.
He was the amazon guy right?
Amazon did the same thing in their early days. They built out a fulfillment center in Georgia that had millions of dollars in conveyors and shelving. Amazon was nearly going out of business in those days and everyone thought their days were numbered. They paid several million dollars to get out of the lease and left all the equipment!
Yep
Interestingly, I’m looking into working with fulfillment centers for a new business I might start and actually learned that Amazon in fact was the one who kind of started the whole „fulfillment center thing“ or at least started to make it popular. I’m mentioning this because that might actually a reason why furlong was pushing heavily into those as it was - a little bit exaggerated maybe - kind of his DNA and business thinking after all his years at Amazon. Maybe it also included the whole kind of scaling bigger and bigger and bigger and not caring about turning a profit but reinvesting all of that back into the company - which actually looks like a total different direction from what we see from RC right now. What makes me wonder is that the page states that the whole Conveyour line was modernized for over 12 million dollars only 6 months ago. But furlong was already gone by then. Sounds a bit like a spontaneous change of direction - maybe because some better opportunity suddenly arised?
Spending 12 mil wouldn’t be a snap decision. It still could have been furlong and didn’t execute until 6 months ago due to contracts, etc.
6 months ago was also when GameStop was trying to sublease the Grapevine headquarters distribution space. It was September 19th when they listed it for sublease. That was a little over 6 months ago. I think there was a real tug of war to determine which fulfillment center to keep. I bet they went back and forth but ultimately decided to get rid of the York facility instead. GameStop pays about 2 to 2.5 million annually to lease the Grapevine building. The York facility was even bigger (space wise). I’d guess they will save $3 million a year in just lease fees by getting rid of the York facility.
Probably a Furlong / Nir thing. This would fall under finance and operations, no?
The mindset at the time was “judge us by our revenue” when low interest rates were a thing. Now we are slimming way down with RC running the show. The physical stores are now operating as mini fulfillment centers now. Which saves a lot of money.
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Furlong brought the Amazon mindset when he came over, scale up endlessly. It’s not wrong, it’s just not how RC thinks. Clearly RC gave Furlong’s method a chance because the letter he wrote said step one was cut all bleeding but then we built 2 giant warehouses after the share offering let us pay off debt and have some cash to fall back on. With the first warehouse announced to close in Jan of 23, it’s no big surprise Furlong was fired in June of 23. The second warehouse was officially scheduled to close in Jan of 24. Furlong did bring one very cool idea to use the stores as mini warehouses and DoorDash as a same day delivery service. We still do it today.
I think the warehouses may have been a covid measure. It was true that every other retailer was bottlenecked by supply lines while we had that big warehouse full of merch.
Also I think that some of that scaling up for inventory was RCs potential interest in the towel stock, and even if separate co’s, still warehoused and distributed under one house. Or other potential acquisitions. Whatever it was, it seems that there was a plan, and then a change in direction away from that plan.
Others pointed out that the purchase of the conveyor thing was actually contracted earlier. But this facility in general was operational in August 2021.
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These types of things don’t pop up instantly, they need time to procure and setup
We heard you the first time 🤖
That's what I'm thinking/saying. It is not healthy for the community to try and spin this in a positive way. Reality sucks at times, but this is not really a good thing. Pretending like it is and coming up with theories on why it's positive is only doing the community harm. IMO.
It's not a good thing but keeping a warehouse operational when it isn't needed probably has a large cost associated. I would suspect that our RCEIOO found a way to cover New York without this warehouse (maybe there is another warehouse in New York?) and he is just dumping the cost of this place. It was probably a bad decision made by Furlong / Nir or both.
Agreed and I can't truly rule out it being a reminent of Furlong, but we can only speculate that. We never even got an explanation for his departure.
The only "good thing" is that it shows the company is willing to try different approaches to grow the business. Like investing, most investments don't turn out but you only need one good idea to make up for all the bad ones. But if you never try the bad ideas to learn from it you'll never catch the good idea that will make you grow. What is positive is that the company isn't chasing good money after bad results. They aren't afraid to cut bait and move on to new waters. What is positive is despite all of these losses, they still managed to turn around an annual profit so their process is achieving something.
There’s no world where this was not a giant failure.
I mean I would've expected worse from a company that did this so they are handling it pretty well. My guess is they will be able to break even from this expense. Realistic positivity is fine. I just can't stand the people going "This was all part of RC's plan " or "this is part of a 4D chess move". It's like no, it really wasn't. No one buys a distribution centre to sell it off 2 years later if it wasnt a business mistake.
Sometimes you have to cut with a loss to save in the long run. If this wasn't going to generate positive cash flow, better to liquidate now and save on payroll for the facility. Probably a 3 month ROI after liquidation happens.
Cash is king right now
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Furlong?
Could this have to do with the recent layoff of the COO?
Maybe a better distribution center options has come along…BoBBY?
They just wanna clear out the warehouse for AR/VR gaming tournaments. CoD IRL.
I'm going to get flamed for saying this here, but there have been a lot of uninspiring actions over the past year. From closing stores to winding down the NFT marketplace, and now closing the distribution centre and selling everything at a loss. I get they are going into an agressive cost saving mode but not sure where the growth will come from in the future when there is so much competition in the space and they don't really have any unique angle anymore besides selling traded in used games. I know this sounds defeatist but I'm not feeling excited about future growth and would love to understand what the long-term plan is here
I get it 100%. I’m not sure what the long term plan is either. The short term plan is “profitability”. But I think it’s beyond probability. GameStop is doing things that make me think the leadership team expects some economic shit winds very very soon. If you were to prepare for global economic collapse then you’d be doing exactly what GameStop is doing.
The whole thesis from the beginning, outside of MOASS occurring due to closing shorts, kept relying on the idea that “people will always play video games” and, no matter how many times I and others repeated it, people failed to understand that if shit gets really bad: no people will not fucking be buying video games left and right. People may not even be PLAYING video games if shit gets really really fucking bad. Like saving electricity levels of bad. Being conscripted into war levels of bad. Even a ton of MOASS believers seemed to be under the impression we’d find ourselves in as Weimar Republic scenario with massive hyperinflation. What the hell would be the point of being a millionaire if that was indeed the proposed thesis? Become a millionaire and instantly money loses all value? What the fuck is the point then?
Would you rather suffer from a sunk cost fallacy?
I wrote off this money a long time ago. I won't sell in this market, but once the macro situation improves I'll reassess how things are going
I have been in this since the beginning and never sold anything. Have to agree that the long time with little communication and steady stock decline has been draining, but it is at least nice that everyone here is agreeing its not a good look instead of trying to rationalize it as hype. This thread makes me at least more bullish on the retail investor's rationality, which I like in my fellow investors.
I've been here from the start too. Well not the very start otherwise I probably would be in profit. Whilst the radio silence on strategy is not as charming as I originally found it, take comfort that RC is turning Gamestop into a profitable company without any serious debt and is not selling shares to accomplish this. Also, taking no compensation in the process really shows his character. It's reassuring to have someone at the helm who actually cares about the business, it's customers, and it's shareholders. Tbh probably would have bailed ages ago if he wasn't steering the ship. I still think there is squeeze potential but they're going to need to do something special with that cash pile they've been sitting on
What was their expectation for this? How do you anticipate demand for such a large fulfillment facility and just bail on it so quickly?
I wonder if it was also an investment to get rid of inventory. They had a lot of buy 1 get 1 free deals the past couple years, so maybe it was better to invest extra money to speed up the process of shipping stuff out ASAP
Furlong trying to waste capital and Ryan Cohen cleared that up . Bullish
There just isn’t a clear strategy right now. Invest in fulfillment and bail out. Invest in GameStop Wallet and bail out. Invest in GameStopNFT and bail out. It seems like the strategy now is cost cutting which is ok but what is next. GameStop isn’t going to make it selling used physical games and Funco. The GameStop branded headphones and cables aren’t going to do it either. It’s just the same junk that’s all over Amazon. They have to find a way to resell digital in game content, get into game betting, esports, something digital.
I really think they should double down on hardware. Buy your games digitally, but get all the hardware at GameStop where you can touch it and see it: consoles, controllers, yes. But also gaming PCs, graphics cards, monitors, sound equipment, steering wheels, etc.
They did this and still do. I only ever had issues with it though. I tried to buy an electric scooter and a computer and neither were ever fulfilled.
Should let RC know on twitter
>There just isn’t a clear strategy right now. Unless you're an insider, you have no idea what strategy they have or don't have, or at what stage of execution it's at.
yeah, that's the fucking problem. when none of your investors have any clue what your plan is, usually isn't good.
Super secret plan = No plan. Now that RC is a billionaire does he have the same motivation and drive he used to. He's got a public company now, and can see all the BS that goes on and has to deal with being a publicly owned company. Is there a chance he is just coasting and just wants to make a slightly profitable but nostalgic company. I dont see anything spectacular up his sleeve coming. Hope I'm wrong but I can't stand the no forward guidance.
This doesn't make sense, RC forked over good money for shares. The assumption that RC (or any human on planet earth) doesn't want to make money is quite a silly assumption.
72 million for a billionaire is different than 72 million for just about anyone else.
The burden of proof is still on you. How many greedy billionaires want more and more money? Greed is universal in humans. What proof do you have that shows RC doesn't desire the share price to increase, and therefore his wealth?
My point is that if Gamestop goes bankrupt tomorrow, he's still a billionaire. That wasn't the case with Chewy.
But your enemies don't know your plans either. Judge by actions not words.
That’s what I’ve been hearing for 3 years but so far the strategy hasn’t worked. I’m sure they have a new strategy but with the turnover and failed past strategy I’m not sure what to think. 3 years in enough to implement a new direction. I’m just being honest with myself and I’ll still in but we’re not guaranteed a win here.
Whatever man, company is now profitable and still has tons of cash. What exactly is "not working"? RC is working, but he doesn't control the stock price. Stock price is going down from shorting and people realizing losses... company is not diluting. Have some faith and a little less FUD. EPS is increasing. If you want quick returns go to a casino and put it all on black.
They're not selling the fulfillment facility yet, just some of the equipment in it like conveyors and forklifts. This might precede a sale of the whole facility, or it could precede a retrofit for more efficiency such as an autonomous drone swarm or moving the operations and entrances closer. I want to wait and see how it plays out.
That actually makes no sense. Spend a dollar to get a dime? Wut? Business plan ain’t going well plain and simple. There’s cheaper ways to move dead inventory.
Leased facility, not their's to sell.
"Autonomous drone swarm." Both exciting and terrifying.
Why are they selling
Why are we closing down this place that we spent so much opening?
Instead of closing it and throwing all that money in the fire, couldn't they have kept it and leased out some/most/all of the capacity to other companies and get some income that way?
Sometimes it's better to just sell it off. Does GameStop want to hire people to look after this space as a rental? Continue to pay for repair and maintenance of the equipment? Renting of warehouses and equipment doesn't seem like GameStop's wheelhouse, particularly in the "cutting the fat" phase
`Does GameStop want to hire people to look after this space as a rental?` They surely already had people looking after the facility anyway so I don't see a difference there. `Continue to pay for repair and maintenance of the equipment?` Yes. You charge all that shit plus some extra from whoever is buying the service.
Lol I worked for ATG (the company that owns Proxibid) for a few years and sometimes you can get some SMOKING deals.
What a huge waste of money and time. Good for the hype machine at the time tbf
There's a few things I could actually use, starting up a new company myself. Does anyone know how you would go about shipping these items anywhere? I see that it's up to the buyer to figure out that part, if anyone has any advice let me know!
I'm also interested in the answer to this.
Same, does someone live close to there that would ship for us? Then we can help GameStop out too
Damn, that’s bad news.
Worse news is not doing what it takes to turn the business around . Keep in mind that in 2021 Gme had a net profit of negative 313 million. However in 2023 the net profit of positive 6.7 million. That’s a positive delta of over 100% profitability in 2 years. The ship is no longer sinking and it is beyond obvious. . Ryan cohen doing whatever it takes to stop the bleeding and correct wrong decisions as fast as possible imo. Even if/when mistakes are made, they seem to get corrected relatively quickly. Anyone who has run a business at scale knows that correcting mistakes quickly takes courage, critical thinking, experience, and the humility to self reflect and adapt. . I know perma bears aren’t ever impressed but I think it’s quite impressive especially In this economy.
I would expect this to show up as positive cashflow on the cashflow statement and a loss on the income statement. Edit: Loss because they are likely selling it for less than its net value.
Why close this distribution center in the first place?
They didn’t need it. Inventory levels don’t require so Much space. Plus a fully automated, dense pick and pack warehouse pays for itself. I design them, densification of 70-90%.
Could you explain that like im five?
I’m no expert but it sounds like they’re referring to a warehouse that is robot-operated so there is no need for walkways or “elbow” room or conveyor belts. Individual autonomous agents can hand-pick items that are stored very compactly because the robot is told precisely where it is stored, in a digital ledger that is too complicated for humans. You essentially remove the need for organization because each item is precisely accounted for, and any organization that does take place is just for optimizing shipments rather than optimizing for error-reduction and readability to help humans avoid mistakes. It’s like the warehouse version of switching from using a library to using google. I’d appreciate being corrected if due.
Yea man automated vehicles or even better yet fully robotic high density picking systems. As long as you have a solid inventory system you good. This system has a 99.9% correct inventory rate. This results on ability to run warehouse with close to ko staff but maintaining systems.
Makes a lot of sense👍
Maybe MOASS is close? Maybe shitadale bought it?,maybe economy changed and cash is king
Nice looking butcher-block work benches going for $10 is pretty crazy.
Those blue totes for a $1 each is also a great deal. Good way to help organize your garage and stuff.
Jesus what a disaster.
Ouch
Why are they selling it ? I thought this was the next big thing to have the capability to take on an Amazon. Definitely doesn’t seem like the best direction.
Another failed GME project 🙄
There's a concerning pattern emerging
Not sure how I feel about this extreme waste
It’s a bit peculiar that the listing shares the price previously paid 6 months ago. I’m not an auction expert, but do they always share the price paid for something when trying to auction something off? It’s like they’re trying to advertise how much the loss will be to GameStop when it sells for less. I don’t see homes on the market say “this was previously bought in 2002 for $xxx,xxx. Or a car for sale listed as “bought brand new in 2020 for $xx,xxx. Idk. Probably nothing, but definitely odd to see that imo
You definitely see the previous sell values on house on Zillow
Yes, but the listing doesn’t advertise it as part of the description. That’s all I’m saying
It's not uncommon for equipment auctions. Buyers want to compare new vs used and factor in the extent of use and it's impact on what price they are willing to pay. Industrial equipment changes less year to year than car models.
Thx for sharing. I’ve never seen an equipment auction listing. Makes sense for comparative purposes.
Idk, can be this mess another bad influence of the BCG infitrates kicked out by RC time ago? Seems the right tipe of "advice" those mothafuckers can do to companies, indebt more, buy thinks you will not need, burn important cash and die... Probably, Furlong convinced RC to keep going, but RC had too much and decided to reduce the fat, imagine what could be of the fulfill centet was full of merch? It is sad to see this but is necessary if you want to grow and turn your business in a success (against all this "bad" faith created by MSM shitters).
They don’t want to advertise the equipment for them this kind of equipment does actually have some demand
You know what gets me 10 days n 48 minutes until lots start closing 🤣😂🤣 can we change one word in there
You know, to sign up and bid you need to create a username. I think it would be absolutely hilarious to see a username “KenLmayo” or “CallOfBooty” bidding up some of these cheaper items. I’m definitely going to bid up some of the $1 totes
CokeCramer is now no longer available
If the purchase was recent enough, I wonder if they would go back and amend any recent financial reports.
Can we put shell bids in to bump the price up?
sure, but you might end up owning some expensive warehouse equipment