In the past few weeks, investors have bid up the share prices of companies such as GameStop Corp. and AMC Entertainment Holdings Inc., as short sellers have bet against them. GameStop is trying to survive a yearslong erosion of its business, which has relied for nearly four decades on people visiting its bricks-and-mortar stores to buy the latest videogames and consoles, as well as to trade in and purchase used games and gear. The company has been stung by mounting competition from retail giants such as Amazon.com Inc. and Walmart Inc., and the advancement of technology that enables people to download games directly from consoles and computers instead of buying hard copies. It has also gone through a period of high executive turnover, with Chief Executive George Sherman — a longtime retail executive who joined GameStop in 2019 — being the fifth person to hold the role since November 2017. To preserve its business, Grapevine, Texas-based GameStop has been working to pay down debt and pledged to accelerate its e-commerce operations. In the recent holiday season, the company’s e-commerce sales rose more than 300% from the comparable year-earlier period, helped by the release of new videogame consoles from Microsoft Corp. and Sony Corp. Analysts expect GameStop to post its fourth consecutive annual decline in revenue in its latest fiscal year amid declines in its core operations and efforts to streamline its business. AMC, the world’s largest cinema chain with nearly 1,000 locations, became the latest darling of the retail trading scene after it signed a series of financing deals that are expected to help it ward off bankruptcy. Since the onset of the coronavirus pandemic forced AMC to temporarily close most of its theaters, the Leawood, Kan.-based company has faced the real possibility of running out of cash, and warned investors in October that it might need to file for chapter 11 if it doesn’t raise enough money from investors willing to bet on its recovery. AMC, the world’s largest cinema chain with nearly 1,000 locations, became the latest darling of the retail trading scene after it signed a series of financing deals that are expected to help it ward off bankruptcy. Since the onset of the coronavirus pandemic forced AMC to temporarily close most of its theaters, the Leawood, Kan.-based company has faced the real possibility of running out of cash, and warned investors in October that it might need to file for chapter 11 if it doesn’t raise enough money from investors willing to bet on its recovery.
