GameStop and AMC’s shares are tearing up, but their business is not

To maintain its business, GameStop, based in Texas, worked to pay off debt and promised to accelerate its e-commerce operations. During the recent holiday season, the company’s e-commerce sales increased by more than 300% compared to the previous year, helped by the launch of new video game consoles from Microsoft Corp.

and Sony Corp.

One of GameStop’s newest board members, Ryan Cohen, co-founder of Chewy Inc., asked the company last year to leave underperforming stores in the US. He also called on the company to close non-significant operations in Europe and Australia and use the proceeds to make technological improvements. , such as refurbishing GameStop’s online store.

Analysts expect GameStop to make its fourth consecutive annual decline in revenue in its most recent fiscal year amid a decline 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 youngest darling of the retail industry after signing a series of financing agreements that are expected to help stave off bankruptcy.

Since the onset of the coronavirus pandemic forced AMC to close most of its theaters temporarily, Leawood, Kan-based company, has had the real opportunity to run out of cash, warning investors in October that they may chapter 11 must apply. if he does not raise enough money from investors who are willing to bet on his recovery.

AMC’s fortune began to turn with the launch of coronavirus vaccines late last year, raising hopes among investors that it will not be too long before people go to the movies again.

The company has been raising about $ 1.3 billion in debt and equity financing since December and sold out its latest shelf offering on January 27, just after users in Reddit’s WallStreetBets forum turned their attention to it as the next stock to rise.

However, AMC is not quite out of the woods yet, and CEO Adam Aron warned on January 25 that although ‘any talk of imminent bankruptcy is completely off the table’, investors in AMC are still advised to be careful to be, the future cash needs of the company are uncertain in light of the ongoing pandemic and new strains of the coronavirus.

—Alexander Gladstone

Bed bath and beyond Inc.

BBBY 5.02%

After an activist investor ousted the previous management in 2019, the household goods retailer is trying to turn around under new CEO Mark Tritton, a former Target Corp.

executive. Mr. Tritton has appointed a new leadership team that sells stores, simplifies pricing and streamlines goods. “The wider the range, the more confused the customer is,” he said. Tritton said in November.

The company includes about 200 of its more than 970 Bed Bath & Beyond stores and has sold assets that are considered insignificant, such as Christmas tree stores. It also launched a share buyback program worth as much as $ 825 million over three years.

The company, which also owns BuyBuy Baby, is benefiting from a shift in spending on pandemics to home appliances. But some analysts worry that once life returns to normal, it will give up some profits as shoppers spend more on travel and dining. The retailer also faces huge competition from mass market chains like Target and online competitors like Amazon. On January 26, before the share of recent gains gave up, UBS downgraded it to “sell” over concerns that it would turn around in pace and start and other issues would continue.

—Suzanne Kapner

Nokia Corp.

NOK -2.77%

In its heyday, Nokia dominated the market for rugged devices built for calling and not much else. Then the smartphone revolution robbed the Finnish company of the market share it once enjoyed, which led to the abandonment of mobile phones and the focus on the building blocks of the mobile economy: networking equipment that connects mobile devices to the rest of the internet.

Nokia’s profitability suffered from the acquisition of Alcatel-Lucent, another network electronics manufacturer, in 2016. The merger has complicated the new company and forced costly upgrades for customers who need standardized cellular equipment. Competitors Ericsson AB and Huawei Technologies Co. took the opportunity to gain market share in key countries.

The company continues to deliver many of the world’s networking devices, a market that could grow this year as transportation companies install new technology to support faster fifth-generation, or 5G, wireless service. The company shook up its management team last year by appointing a new CEO and CFO.

Nokia is preparing to sell more machines to replace equipment for Huawei’s cell towers, which are in China, which has effectively banned the US and many allied countries due to concerns about national security. But geopolitics have cut both sides, and rising tensions in the West could slow Nokia’s own sales in China.

—Drew FitzGerald

BlackBerry Ltd.

BB -3,75%

BlackBerry CEO John Chen has successfully saved the Canadian company from near collapse after being hired in 2013 to reinvent a smartphone maker that had ceded its global market dominance to more savvy competitors such as Apple. Inc.

and Samsung Electronics Co.

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

Mr. Chen, a veteran of the software, sought to rediscover BlackBerry by selling software and services designed to protect business and government communications systems and mobile devices against viruses and other online threats.

He tried to expand this business in 2018 with a $ 1.4 billion acquisition of Cylance Inc., an antivirus software maker. The acquisition did not yield the promised turnaround. Cuance co-founder Stuart McClure left in 2019 and BlackBerry’s revenue continues to decline. The company has reported net losses over the past seven quarters.

Another setback is the unequal demand for cars during the Covid-19 pandemic. BlackBerry sells security products to automakers to protect computer and communications systems in automobiles from cyber threats.

—Jacquie McNish