GameStop’s Dizzying Surge Makes Its Japan Peer Look Like a Bargain by Bloomberg



© Reuters GameStop’s soaring rise makes its peer in Japan look like a bargain

(Bloomberg) – Looking for an alternative to the highly volatile peaks and troughs of GameStop Corp (NYSE 🙂 trading. The video game retailer’s rally is making Geo Holdings Corp. (T :), a Japanese game and DVD retailer, look positively cheap by comparison. The Japanese firm is trading at about 0.2 times its previous sales, compared to GameStop’s valuation of nearly 2 times on Wednesday. What the activist investor board members – and an army of Reddit-powered backers – lacks, Geo makes up for in regular dividend payments, plus it has only posted a net loss in two quarters in recent years. 10 quarters, compared to GameStop’s 8, shows data compiled by Bloomberg. Geo has generated a profit of $ 22 million in the last 12 months against a loss of $ 275 million for its US peer. Michael Burry calls GameStop Rally ‘unnatural, crazy’ And while no one thinks Gamestop’s earnings have anything to do with its fundamentals, consider that Geo is trading at just 1/20 of GameStop’s market value (based on the latest version of the American firm). close, at least), and it operates in a country that still loves physical media. The company manages more than 1,000 of its geographic locations in Japan. Like GameStop, it accepts trades for second-hand games, while also renting movies and CDs (Japan does not allow video game rental by law). Another plus is Geo’s “2nd Street” chain of stores, which sells used clothing, shoes and electronics. Geo estimates that the second-hand market in Japan will nearly double in size in 2025 to 3.5 trillion yen ($ 33.8 billion) from 2015, with the online flea market Mercari Inc. another beneficiary of this. trend. As movie rental sales decline, Geo has seen the segment represent an increasing share of its business. © 2021 Bloomberg LP

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