GameStop plans to sell off French and Canadian operations, giving its cash pile more space to shine

This probably wasn’t the GameStop pivot you were looking for.

In a statement this morning, the video game retailer announced that it intends to sell its operations in both France and Canada as part of a reevaluation of its international footprint. Shares are little changed in premarket trading.

GameStop bulls have been primarily focused on what a Ryan Cohen-led company could buy with a $4.6 billion pile of liquid assets, not what he could sell. Some collectibles businesses have been floated as possible acquisition targets. More recently, the possibility of using that money on hand to buy bitcoin caused the stock to ramp, helped along by a picture Cohen posted with himself and Strategy CEO Michael Saylor as well as media reports on the topic.

Expense control isn’t necessarily as sexy as adding bitcoin to a corporate treasury. But expense control — unlike forays into crypto — is something management has been able to successfully execute on in a way that’s unlocked the ability to generate net income.

Quarterly adjusted operating costs are down about 13% since Cohen took over as CEO in September 2023, continuing a trend that’s seen the four-quarter average of these expenses halved from their 2016 peak to hit their lowest level since 2007.

The company’s core business of selling video games has been a consistently unprofitable endeavor as of late, with the firm failing to book an annual operating profit since 2020.

If you think of GameStop as a relatively high-cost T-Bill fund masquerading as a retailer, these kind of measures are what give its cash pile more leverage to be a bigger driver of its total bottom-line results.