‘Heads, I win. Tails, I don’t lose much.’

That was the quote by Monish Pabrai, author of The Dhandho Investor that came to my head when I was looking at GameStop.

The problem

GameStop Corporation is one of the largest gaming retailers with 5,800 stores peppered around the world. The share price of the company has been on a decline for the past six years as GameStop faces digital disruption. Today, gamers don’t have to step out of their house to get their consoles, accessories, and games. Everything can be purchased online — you can buy your gaming electronics on Amazon or purchase your games from the PlayStation Store or Xbox Game Store and download them straight to your console.

When you pair structural decline with the end of a gaming console cycle, you’ll get a taste of bitter performance and a bold flavour of negativism surrounding GameStop.