GameStop banks $3B in 25 days: It's a better T-bill fund than a company

GameStop has done it again. 

The brick and mortar gaming retailer completed the sale of 75 million shares announced last Friday, raising a little over $2.1 billion. That’s on top of the $934 million raised in May.

At its lowest point this year, GameStop’s market cap was about $3.1 billion. It’s raised that much in cash in the past 25 days.

The company is undeniably cash-rich. If we take the $1 billion and change in cash on its balance sheet from its latest quarterly report plus the proceeds from the past two offerings, it adds up to about $4.15 billion.

My colleague Jack Raines suggested that GameStop’s best-selling product is its own stock. Well, let’s take that a literal step further. Assume GameStop invests its cash holdings in three-month Treasury bills. That would come out to about $56 million in interest income for the next quarter – which is more than the company’s operating income for any three-month period since Q4 2020, before its first meme mania began. 

Granted, it’s hard to know the counterfactual here — GameStop was able to tap retail investors for cash, which allowed them to spend more freely. But it’s still a stark reminder that the legacy business decline is all too real, and the turnaround plan is just hope and hype about what Ryan Cohen might do.