What Is GameStop, the Company, Really Worth? Does It Matter?

Mr. Cohen argued that GameStop could thrive by cutting real estate costs and making the company’s online offering more attractive. It would have “competitive pricing, broad gaming selection, fast shipping and a truly high-touch experience that excites and delights customers,” he wrote.

A representative for Mr. Cohen, who was appointed to the retailer’s board this year along with two other executives, declined to comment.

Even analysts who think GameStop’s stock has become a bubble said that the company has some things going for it. Mr. Pachter, the Wedbush analyst, said that George Sherman, who was appointed GameStop’s chief executive in 2019, had strengthened its finances, giving his team time to attempt a turnaround.

Mr. Pachter says the shift to downloading games from the internet is not as big a threat to GameStop as it looks. The company has a solid business in allowing customers to trade in old games that keeps people coming into its stores. For that reason, it’s not Tower Records, he argues, referring to the music store empire whose parent company declared bankruptcy in 2004.

Gamers love to gripe about GameStop’s trade-in prices, saying the company sometimes pays less than $2 for them. Yet GameStop also occupies a nostalgic niche, reminding people of a time when browsing for bargains or searching for the newest hit gaming title entailed a trip to the mall. So what if the stores had an aesthetic that might best be described as the opposite of Apple’s sleek, minimalist outlets?

Aaron Littman, a dog walker in Manhattan, is a regular customer because GameStop stores have a good selection of used games, which he buys when his 6-year-old son visits. “I stock up on the ones he really likes,” Mr. Littman said on Friday outside a GameStop on 14th Street in Union Square.

With its future far from certain, GameStop could take advantage of the mania in its stock by issuing new shares. That would bring in a considerable amount of new money that could be used to reduce debt and give it resources to invest in its business.