Is GameStop Headed For Bankruptcy?
The prospects for GameStop (NYSE: GME) stock have appeared increasingly grim. The market has steadily shifted away from the physical games GameStop sells, pressuring earnings -- and the stock price. Cool Holdings missing its first installment payment on the Simply Mac business and a recent debt downgrade by Moody's have added to the troubles. A string of losses and massive revenue declines also cast doubt on GameStop's ability to survive.
However, while industry trends have pummeled GameStop stock, other opportunities in gaming may throw it a lifeline. Despite a tenuous outlook, GameStop is still unlikely to go bankrupt.
It does not take a financial journalist to figure out why GameStop stock has plunged since 2013. As consumers switch from physical to downloaded video games, they have fewer reasons to walk into a GameStop store, let alone make any purchases. As with numerous other consumer discretionary stocks, many investors have turned on GameStop for this reason.
Source Fool.com
