GameStop Corp. (NYSE: GME) saw its shares climb 3.57% to close at $21.76 on Friday, with additional gains in after-hours trading reaching $22.19, after the company issued a bullish profit forecast. The videogame retailer now anticipates adjusted EBITDA exceeding $600 million for the fiscal year ending January 30, 2027, nearly doubling the $345.4 million recorded in fiscal 2025.
Market Cap Mirrors Cash Holdings
The company's market capitalization now stands at approximately $9.76 billion, closely aligning with its reported $9.7 billion in cash, marketable securities, digital assets, and pledged collateral. This convergence has shifted investor focus from traditional meme-stock dynamics toward a more fundamental valuation, where the equity is increasingly viewed as a leveraged play on GameStop's substantial cash reserves.
As of the first quarter, GameStop reported $7.40 billion in cash, $970.5 million in marketable securities, and $4.17 billion in long-term debt. Adjusting for these items, the enterprise value is roughly $5.56 billion—about 9.3 times the new adjusted EBITDA guidance. Including the broader asset bucket of $9.7 billion, the multiple drops to approximately 7 times, underscoring the company's cash-rich profile.
Ryan Cohen's eBay Pursuit
Chairman and CEO Ryan Cohen continues to pursue a bid for eBay Inc. (NASDAQ: EBAY), a move that has added complexity to GameStop's valuation. GameStop disclosed ownership of 4.34 million eBay shares outright, along with put and call options tied to an additional 39.05 million shares that can now be physically settled. Cohen has personally committed $500 million of his own capital to the transaction, stating in a podcast, "I'm putting 500 million of my own money into this transaction," and adding that he "would not go away."
eBay's board, however, has rejected the offer, calling it "neither credible nor attractive" in a letter dated May 12, citing concerns over financing, leverage, operational risk, and governance. Event-driven research firm Gordon Haskett expressed skepticism, with analyst Don Bilson telling Reuters that "there is zero chance that a tender offer works."
Financial Performance and Outlook
First-quarter results supported the optimistic outlook. Net sales rose to $835.3 million from $732.4 million a year earlier, while net income reached $389.6 million—though this included a $268.4 million unrealized gain from derivatives tied to eBay shares. Excluding that gain, adjusted EBITDA for the quarter was $163.4 million, already representing 27% of the full-year target.
The company did not provide a specific sales target in its filing, noting that reconciling the forward-looking non-GAAP figure to net income is not possible without unreasonable effort due to unpredictable items.
Market Context and Short Interest
GameStop's stock performance outpaced major indices last week. While the Nasdaq Composite fell 4.6% and the S&P 500 dropped 2%, GameStop gained 2.93% over five days and is up 8.37% year-to-date. The stock's short interest stood at 57.05 million shares as of June 15, representing 13.95% of the float, which could amplify volatility. The company also has a $2 billion buyback authorization—about 20% of Friday's market cap—though it is not on a set schedule.
U.S. markets will be closed on Friday, July 3, for the Independence Day holiday, shortening the upcoming trading week.
