GameStop and AMC’s shares are in shambles, but their businesses are not

To preserve its business, GameStop, based in Grapevine, Texas, has been working to pay off debt and has pledged to accelerate its e-commerce operations. In the recent holiday season, the company’s e-commerce sales increased by more than 300% over the same period last year, helped by the launch of new Microsoft video game consoles. Corp.

and sony Corp.

One of GameStop’s newest board members, Chewy Inc. co-founder Ryan Cohen, asked the company last year to close underperforming stores in the United States. He also asked the company to close non-essential operations in Europe and Australia and use the resources to make technological improvements, such as renovating GameStop’s online store.

Analysts expect GameStop to record its fourth consecutive annual decline in revenue in its last fiscal year, amid declines in its core operations and efforts to streamline its business.

—Sarah E. Needleman

AMC AMC 53.65%

Entertainment Holdings

AMC, the world’s largest cinema chain with almost 1,000 locations, has become the last darling of the retail market after signing a series of financing deals that are expected to help it avoid bankruptcy.

Since the beginning of the coronavirus pandemic forced AMC to temporarily close most of its cinemas, the Leawood-based company Kan. Faced the real possibility of running out of money and warned investors in October that it might be necessary to request the chapter 11 if you don’t raise enough money from investors willing to bet on your recovery.

AMC’s fortunes began to change with the introduction of coronavirus vaccines at the end of last year, which has increased hope among investors that it won’t be long before people start going to the movies again.

The company has raised about $ 1.3 billion in debt and equity financing since December, selling its last offering on January 27, shortly after Reddit’s WallStreetBets forum users turned their attention to it as the next action to take. to sustain.

However, AMC is still not entirely out of the woods, and Chief Executive Adam Aron warned on January 25 that although “any talk of an impending bankruptcy is completely out of the question”, investors in AMC are still advised to be cautious, as the company’s future cash needs are uncertain in light of the ongoing pandemic and new strains of the coronavirus.

—Alexander Gladstone

Bed Bath & Beyond Inc.

BBBY 5.02%

After an activist investor sacked the previous administration in 2019, the household goods retailer is trying to turn things around with new CEO Mark Tritton, formerly Target Corp.

executive. Mr. Tritton has hired a new leadership team that is organizing stores, simplifying prices and optimizing goods. “The wider the range, the more confused the customer is,” Tritton said in November.

The company is closing about 200 of its more than 970 Bed Bath & Beyond stores and has sold non-essential assets, such as Christmas Tree Shops. He also launched a share buyback program totaling up to $ 825 million in three years.

The company, which also owns BuyBuy Baby, is benefiting from a shift in spending driven by the pandemic for household items. But some analysts fear that when life returns to normal, it will lose some gains as customers spend more on travel and eating out. The retailer also faces stiff competition from mass-market networks like Target and online rivals like Amazon. On January 26, before the stock gave up some of its recent gains, UBS downgraded it to “sell” due to concerns that its recovery would gradually take place and other issues.

—Suzanne Kapner

Nokia Corp.

NOK -2.77%

Nokia in its heyday dominated the rugged handset market, made for making calls and not much else. Then, the smartphone revolution robbed the Finnish company of the market share it once enjoyed, leading the company to abandon cell phones and focus on the building blocks of the mobile economy: network devices that connect mobile devices to the rest of the internet.

Nokia’s profitability has suffered since the acquisition of Alcatel-Lucent in 2016, another manufacturer of network electronics. The merger made the new company more complex and forced expensive upgrades for customers looking for standardized cellular equipment. Competitors Ericsson AB and Huawei Technologies Co. took the opportunity to gain market share in important countries.

The company still supplies much of the world’s network equipment, a market ready to grow this year, as operators install new technologies to support faster fifth generation, or 5G, wireless services. The company last year shook its management team by appointing a new chief executive and chief financial officer.

Nokia is preparing to sell more machines to replace Huawei’s China-based cell tower equipment, which the United States and many allied countries have effectively banned for national security reasons. But geopolitics cuts both ways and rising tensions with the West could hurt Nokia’s own sales in China.

—Drew FitzGerald

Blackberry Ltd.

BB -3.75%

BlackBerry CEO John Chen successfully rescued the Canadian company from nearly a meltdown after being hired in 2013 to reinvent a smartphone maker that had given up its dominance of the global market to more agile competitors like Apple Inc.

and Samsung Electronics Co.

He reduced the company’s global staff and operations and licensed other manufacturers to make BlackBerry phones.

Mr. Chen, a software veteran, sought to reinvent the BlackBerry by selling software and services designed to protect corporate and government communication systems and mobile devices from viruses and other online threats.

He sought to expand his business in 2018 with the purchase of $ 1.4 billion from Cylance Inc., a maker of antivirus software. The acquisition did not deliver the promised turnaround. Cylance co-founder Stuart McClure left in 2019 and BlackBerry’s revenues continue to decline. The company reported net losses in the past seven quarters.

Another setback is the uneven demand for automobiles during the Covid-19 pandemic. BlackBerry sells security products to car manufacturers to protect computers and communication systems in cars against cyber threats.

—Jacquie McNish